Author: Irwin Collier

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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.

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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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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)”.

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Chicago Economists Harvard

Harvard. T.N. Carver’s link to US publicist of Protocols of the Elders of Zion, 1921

Today’s posting assembles a few items from the garden of internet archival delights that I stumbled across last night.  

I’ll share in the actual sequence of “discoveries” just as one damn thing led to another. I’ll also lightly annotate with an indication of what I was thinking at each step of the way.

(1) The evening began, as it often does, with a refreshing dive into the Hathitrust.org digital archive, this time in search of artifacts related to the reception of/reaction to Marxian economics in American colleges and universities.

The first artifact that caught my eye (i.e. one that had either not come up before or I overlooked in previous searches) had the title “Making Socialists Out of College Students” by one Woodworth Clum, Western Reserve University (Class of 1900). The pamphlet had no explicit date but can be safely dated ca. 1921. The cover-art (posted above) from the San Francisco Bulletin by Ralph O. Yardley was simply irresistible. The purpose of the pamphlet was to name names of “pink” professors, i.e. socialist fellow-travelers and warn of their bad influence on their young students. Clum wrote: “…when I find a slow poison being secretly and successfully injected into our body politic through the class rooms, I do worry—and so should you.”

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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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[Woodward Clum identifies professors “valiantly fighting the socialist trend”. ]

            You must not get the impression that the teaching of socialism dominates in the sociological departments [“social science departments” is more likely Clum’s meaning] of our American universities,—but its teaching is going on apace. The fact that so many professors have been discharged from leading universities for their unsound economic theories is evidence itself that the presidents and boards of trustees of those universities are keenly alive to the developments. It is the duty of all real Americans to strengthen the hands of those professors who are valiantly fighting the socialist trend. Hunt them up in your own community—and help them defend America.

Among such thorough American professors who are doing a heroic work at this time are Professor T. N. Carver of the Department of Economics, Harvard University, and Professor Laurence Laughlin, Emeritus Professor of Economics at the University of Chicago. Professor Carver has written a very clear preface to Brasol’s “Socialism versus Civilization,” published by Scribners and which should be included in every’: American library. Professor Laughlin has recently published ten pamphlets, exposing not only the fallacy of socialism but also presenting some very excellent suggestions concerning . present industrial difficulties.

When we say that parents of boys and girls attending: school in America should ascertain what sort of economics their children are being taught, it is in the hope that support and encouragement will be given to those educators who are endeavoring to develop sound American economics—just as much as to expose the teaching of economic fallacy.

 

Source: Woodward Clum, Making Socialists Out of College Students. Los Angeles: 1921.

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(2) Clum’s pamphlet reminds me of the first book of the young William Buckley, God and Man at Yale, that warned the world in general and Yale alumni in particular of the corrupting influences of atheist and/or Keynesian professors. Since both Thomas Nixon Carver (Harvard) and J. Laurence Laughlin (Chicago) have appeared multiple times in Economics in the Rear-View Mirror, my next step was to run down the books cited by Clum.

Boris L. Brasol. Socialism vs. Civilization with an Introduction by T. N. Carver, Professor of Political Economy at Harvard University. New York: Charles Scribner’s Sons, 1920.

J. Laurence Laughlin. Tracts for the Times: Labor and Wages. New York: Scribner’s Magazine for March, 1920.

I The Solution of the Labor Problem
II Management
III The Hope for Labor Unions
IV Monopoly of Labor
V Is Labor a Commodity?
VI Socialism a Philosophy of Failure
VII Wages and Prices
VIII The British Industrial Crisis
IX British and American Labor Problems
X Extravagance

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(3) It is patently obvious from the slightest familiarity with the writings of Carver and Laughlin that both were highly critical of socialist doctrine so that the new questions were (a) who was this anti-socialist, Boris Brasol, for whom Thomas N. Carver wrote an introduction, and (b) what was the nature of their professional relationship? From the tone of the introduction there is really no indication of a particularly close relationship between the Carver and Brasol. Carver merely provided anti-socialist boiler-plate, presumably intended as a favor for a good cause. 

And so who was Boris Brasol?  Archive.org provides two documents identified as having been obtained under the Freedom of Information Act from the U. S. Federal Bureau of Investigation (FBI):

Freedom of Information Act Documents.

Brasol, Boris-HQ-1 ; Brasol, Boris-HQ-2

Only one plot-spoiler from these FOIA documents now. What struck my eye was that Boris Brasol was clearly identified by a reliable source as having played a role in the propagation of the English translation of the anti-semitic, forged “Protocols of the Elders of Zion” in the United States.

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(4) Not just taking the FBI’s word for it, I found that the Anti-Defamation League (http://www.adl.org) identifies Boris Brasol as the publicist behind the publication of the Protocols:

American Debut

The Protocols were publicized in America by Boris Brasol, a former Czarist prosecutor. Auto magnate Henry Ford was one of those who responded to Brasol’s conspiratorial fantasies. “The Dearborn Independent,” owned by Ford, published an American version of the Protocols between May and September of 1920 in a series called ‘The International Jew: the World’s Foremost Problem.” The articles were later republished in book form with half a million copies in circulation in the United States, and were translated into several foreign languages.

By 1927 Ford had repudiated the “International Jew,” but hundreds of thousands of people around the world had been encouraged by his initial endorsement to accept the Protocols as genuine.

 

Source: Anti-Defamation League website.

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At the end of the day I have to admit that I am not sure how much one should fault the economist Thomas Nixon Carver for having had any dealings with someone like Boris Brasol. At the least we can count this as a case of a failure of intellectual due diligence on Carver’s part.  Maybe Socialism vs. Civilization is not a bad book, but seeing where it has come from, I’ll leave reading it for now to historical experts mining the lunatic fringe of the American political right.

 

 

 

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Chicago Economists

Chicago. James Buchanan’s Dissertation Outline, 1947

James McGill Buchanan, Jr.’s Ph.D. in economics at the University of Chicago was awarded in the summer quarter of 1948. The title of his dissertation was “Fiscal Equity in a Federal State”. From the Milton Friedman papers at the Hoover Institution we have the following transcription of the mimeographed dissertation outline submitted by Buchanan that was discussed in the economics department faculty meeting of October 24, 1947. The agenda of that faculty meeting along with Milton Friedman’s handwritten additions (in square brackets) are included at the end of this posting. The procedure for admission to Ph.D, candidacy is described in a 1949 memo written by Milton Friedman to members of the Department’s Ph.D. Thesis Committee.

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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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2. Present Procedure
[1949, University of Chicago, Economics]

a. Admission to candidacy. As I understand it, we have no very formalized procedure or requirements. Students typically discuss possible thesis topics with one or more faculty members, construct outlines of the projected thesis, ordinarily get the reaction of one or more faculty members to it, revise it accordingly, and then formally submit the thesis topic and outline to the Department for approval and admission to candidacy. The submitted outline is occasionally extremely detailed, occasionally very general, and is sometimes accompanied by a general statement of objective and purpose, sources of material for the thesis, etc.

[…]

Source: Undated memo (early 1949) written by Milton Friedman to members of the Committee on Ph.D. Thesis Outlines and Requirements from Hoover Institution Archives. Milton Friedman Papers, Box 79, Folder 5 “University of Chicago Minutes, Ph.D. Thesis Committee”.

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Dissertation Outline, James M. Buchanan, October 1947

J. M. Buchanan

EQUITY CONSIDERATIONS IN INTERGOVERNMENTAL FISCAL ADJUSTMENT

I. The Problem —

A. The federal political structure

1. Federalism in political theory. Varying degrees of dual sovereignty. The question of the finality of a federal structure. Is it a final point in political organization or merely a stage in an evolutionary process?

2. The historical development of federalism in the United States. Trends toward centralization and opposing tendencies. The expanding role of government on the whole. The expanding sphere of activity of the central as opposed to subordinate units. Projection of future trends.

3. The case for federalism as a permanent political structure in the United States. Its value as a means of a division of power, as a protection against a tyranny of the majority, etc.

4. Statement of viewpoint on federalism taken in this study.

B. The national economy —

1. The historical development of the expanding scope of the economy. The extension of the market, the trend toward economic centralization, in the sense that the nation has become the unit which defines the area of the allocation of resources.

2. The extent to which the economy is national — increasing specialization, increased resource mobility, etc.

C. Conflicts which arise in the financing of government due to the superimposition of a federated political structure on a national economy.

1. The heterogeneity of the subordinate units of government. Resource heterogeneity. Cultural, social differences. Income disparities leading to differentials in tax burdens and service standards. The basic fiscal inequity inherent in such a structure.

II.            A Theoretical Solution –

A. What is fiscal equity in such a structure?

1. Definition and limitation. For present purposes concept narrowed to that of “equal treatment for equals and unequal treatment for unequals”. Abstraction from any attempt to determine equity as between unequals since such a concept not needed for problems considered.

B. Application of the concept —

1. Necessity of benefit calculation for any determination of equity among individuals in separate subordinate governmental units. Difficulties in benefit calculation, aside from special cases. Assumption of per capita general expenditure as best measure of benefit.

2. Definition of the “fiscal residuum” or “net tax” – Net value of services available less net value of taxes paid. Considerations of “government” as the total of all layers in structure, federal, state, and local.

C. Arithmetical Examples –

Examples illustrating possible application of the equity criteria in hypothetical cases. Illustration that “equal treatment for equals and unequal treatment for unequals” will impose geographical financial neutrality upon the individual.

III.           A study of Comparative Fiscal Treatment of Similarly Situated Individuals in High Income and Low Income States –

A. Selection of states considered – one with high per capita income, one with low. (Tentatively have selected New York and Mississippi.)

B. Assumptions and abstractions –

1. Assumption of the State-Local fiscal problem as solved or non-existent. Application of criterion to 2-level structure only. State-local considered as one unit. Seek only interstate differentials, not intrastate here.

2. Assumption of money income as measure of economic position. Abstraction from non-pecuniary advantages of geographical location. Individuals considered in similar economic circumstances if money income, pproperty value, same. Physical property same. Family obligations same.

C. Selection of hypothetical individuals to be compared. Determination of income ranges to be covered.

D.            Expenditure pattern of individuals considered.

1. Proportion of income saved, spent at various income levels.

2. Distribution of expenditure at various income levels.

3. Property holdings at different income levels.

E. Determination of tax burdens of individuals considered.

1. Examination of tax structures of states in question.

2. Assumptions as to final incidence of state taxes. More than one set of assumptions can be made and results collocated.

3. Tax burden of hypothetical individuals in each income group in each state can be determined by application of assumptions as to incidence to expenditure patterns.

4. Indication that validity of the study does not depend upon validity of the assumptions as to incidence since no attempt is made to compare dissimilarly situated individuals. (Such a comparison will necessarily show in the computation, however, and for this reason the assumptions should be as realistic as possible.)

F. Determination of value of benefits of government service provided —

1. Necessity to use per capita general expenditure as best benefit measure.

2. Use of value input only not value output. Value output will differ as administrative efficiency of state varies.

G. Calculation of fiscal residua of similarly situated individuals considered —

1. Possibility of abstracting from federal taxes and expenditures since similarly situated individuals supposedly treated similarly by federal government.

H.            Calculation of the interstate differential in fiscal residua of the hypothetical similarly situated individuals considered.

IV.           Existing and proposed attempts at solution.

A. Vertical Integration

1. Examination of the various proposals made to integrate and unify the whole financial structure; plans for realignment of functions, central collection, local administration, complete centralization, etc.

B. Horizontal Integration and Coordination –

1. Readjustment of geographical boundaries, consolidation of non-efficient units. The “regionalism” approach.

C. The grant-in-aid as the adjusting device.

1. The existing structure of grants-in-aid in the United States – a short summary of the more prominent characteristics of the system.

2. Proposals for extension of the system –

a.            Further use of the conditional grant

(1)  Merits of the conditional grant

(2)  Drawbacks

(a)  Effects on budgetary independence of subordinate units.

(b) Central direction and interference.

b.            The concept of a “minimum standard”

(1)  Idea of the “national interest”

(2)  Attempts at defining “minimum standards”

(3)  Violation of equity criteria

(4)  Federal assumption of a function.

D.            Realistic Appraisal of Various Proposals from Standpoint of Political and Administrative Feasibility.

V.            Policy Implications of the Criterion of Equity Proposed in this study.

A. The practicability of direct application.

1. Difficulty of measurement

2. Political and administrative barriers.

B. Effect of the Acceptance of the Theoretical Validity of the Criterion upon Practical Policy.

1. Early elimination of matching requirements in grant-in-aid distribution.

2. Early abandonment of the concept of “minimum standards”.

3. Broadening of purpose for which grants are made.

4. Further extension of so-called “equalization” grants.

5. Elimination of the idea of “charity” in intergovernmental fiscal adjustment.

6. Greater federal reliance on the income tax as a source of revenue.

C. The proposals of the Canadian Royal Commission and Possible Application of Similar Proposals to the United States.

VI.           Possible Objections to the Equity Criterion Proposed and its Policy Implications.

A. Theoretical Objections

1. The central government as the adjusting unit.

2. The inclusion of fiscal treatment by government in the criteria for the optimum allocation of resources.

3. The nation as the economic unit.

B. Administrative Objections.

1. Violation of principle of fiscal responsibility.

VII.          Conclusion.

____________________________

 

Department of Economics
AGENDA
Friday, October 24, 1947, at 3:30 p.m. in SS424

I. Students’ Business

A. Admission to Candidacy for the Ph.D. Degree

James M. Buchanan

Subject: Equity Considerations in Intergovernmental Fiscal Adjustment.
Field: Government Finance
Committee: [Blough, chairman, Perloff, Knight]

Henry Woldon Hewetson

Subject: An Examination of the Distance Principle of Railway Freight rate making with references to Canadian Conditions.
Field: [Transportation]
Committee: [Sorrell, Koopmans, Friedman]

[Inserted:

Harriett D. Hudson.

Progressive Mine Workers of America
Committee: Douglas, ch; Nef; (illegible name) Lewis]

Norman Maurice Kaplan

Subject: Models for Socialist Economic Planning
Field:
Committee: [Marschak, ch.; ch. Harris; A. P. Lerner; Friedman

Raymond H. McEvoy

Subject: Effects of Federal Reserve Policies, 1929-36
Field: Money, Banking, and Monetary Policy
Committee: [Mints, Hamilton, Metzler]

Wallace E. Ogg

Subject: A Study of Maladjustment of Resources in Southern Iowa
Field: Agricultural Economics
Committee: [Johnson, Hardin (pol sci), Lewis]

B. Admission to candidacy for the Alternative Master’s Degree (without thesis.)

Raymond H. McEvoy

C. Admission to candidacy for the Regular Master’s Degree

Peter Senn

Subject: Federal subsidization of the Banks
Field:
Committee:

D. Petitions

Guy Black—for permission to substitute work in Mathematics for the regular requirement of a second foreign language.

Keith O. Campbell—for approval to take Political Science as one of the fields for the Ph.D. Degree.

Gershon Cooper—to substitute the following courses in math. for the German language requirement for the Ph.D. Degree: Mathematics 216, 220, and 228.

Bernard Gordon—to substitute a mathematical sequence of Calculus I and Calculus II in place of one of the language requirements for the Ph.D. Degree.

Dale A. Knight—to use Political science as one field for the Ph.D. Degree.

Chih-wei Lee—to take English as the second language.

[John K. Lewis]

II. Encyclopedia Britannica Economic Articles

III. Language requirements for Foreign students.

IV. Report of Master’s Degree Committee, Spring and Summer, 1947

V. New Business

 

Source: Hoover Institution Archives. Milton Friedman Papers. Box 79, Folder “79.1 University of Chicago Minutes Economics Department 1946-1949”.

Image Source: The Concise Encyclopedia of Economics. Biography of James M. Buchanan.

 

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Economists Harvard

Joseph Schumpeter on Methodological Individualism, 1908

Thanks to V. L. Elliot, a member of the faculty of the National Intelligence University in Washington, D.C., Economics in the Rear-View Mirror has been provided the following English translation of Joseph Schumpeter’s chapter on methodological individualism from his 1908 book Das Wesen und Hauptinhalt der theoretischen Nationalökonomie.

1908_Schumpeter_Ch6_MethodologicalIndividualism_1980EngTranslation

Ellliot writes:

[The chapter] was published in 1980 with the permission of E. B. Schumpeter, the author’s widow by an Institute in Belgium that subsequently ceased operations.  The publishing run appears to have been a short one.  Thanks to the great determination and professionalism of a wonderful librarian, Ms. Denise Campbell, I was able to acquire the PDF after a ten year search that began when I read Professor Klein’s contribution to a series of volumes on the work of Hayek (Hayek wrote the introduction to the pamphlet).

Professor Peter Klein described the book and pamphlet that is contained in the PDF file on his web site in 2009:

“The book made quite a splash in the German-speaking world and Schumpeter received many requests for an English translation, but he wouldn’t allow it, or to have the book reprinted in German. In 1980 a single chapter, “Methodological Individualism,” was translated and published in pamphlet form, with a short introduction by Hayek…. The pamphlet has been very difficult to get until now.”

In the meantime an English translation of the entire book by Bruce A. McDaniel has been published as The Nature and Essence of Economic Theory by Transaction Publishers in 2010.

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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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Berkeley Chicago Columbia Economists

Columbia. Wesley C. Mitchell’s Methodological Thoughts, 1928.

The following excerpts from a typed copy of a letter from Wesley C. Mitchell to John Maurice Clark dated August 9, 1928 come from Mitchell’s papers with a hand-written note at the top of the first page, “Revised Feb 11, 1929”. The copy was made by Clark and perhaps given to Mitchell for further comment.

Mitchell begins with a longish response to a question posed by Clark regarding Mitchell’s own professional revealed preference for empirical investigation. This is followed by shorter responses to questions about the origin of his interest in business cycles, the relationship of “analytical description” to “causal theory”, and finally Mitchell’s confessed own perceived shortcomings in the use of statistical techniques for trend and seasonal analysis.

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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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Letter from Wesley C. Mitchell to John Maurice Clark
9 August 1928 (excerpt)

[…]

            Concerning the inclination you note to prefer concrete problems and methods to abstract ones, my hypothesis is that it got started, perhaps manifested itself would be more accurate, in childish theological discussions with my grand aunt. She was the best of Baptists, and knew exactly how the Lord had planned the world. God is love; he planned salvation; he ordained immersion; his immutable word left no doubt about the inevitable fate of those who did not walk in the path he had marked. Hell is no stain upon his honor, no inconsistency with love.—I adored the logic and thought my grand aunt flinched unworthily when she expressed hopes that some back-stairs method might be found of saving from everlasting flame the ninety and nine who are not properly baptized. But I also read the Bible and began to cherish private opinions about the character of the potentate in Heaven. Also I observed that his followers on earth did not seem to get what was promised them here and now. I developed an impish delight in dressing up logical difficulties which my grand aunt could not dispose of. She always slipped back into the logical scheme, and blinked the facts in which I came to take a proprietary interest.

I suppose there is nothing better as a teething-ring for a child who likes logic in the garden variety of Christian theology. I cut my eye-teeth on it with gusto and had not entirely lost interest in that exercise when I went to college.

There I began studying philosophy and economics about the same time. I found no difficulty in grasping the differences between the great philosophical systems as they were presented by our text-books and our teachers. Economic theory was easier still. Indeed, I thought the successive systems of economics were rather crude affairs compared with the subtleties of the metaphysicians. Having run the gamut from Plato to T. H. Green (as undergraduates do) I felt the gamut from Quesnay to Marshall was a minor theme. The technical part of the theory was easy. Give me premises and I could spin speculations by the yard. Also I knew that my “deductions” were futile. It seemed to me that people who took seriously the sort of articles which were then appearing in the Q.J.E. might have a better time if they went in for metaphysics proper.

Meanwhile I was finding something really interesting in philosophy and in economics. John Dewey was giving courses under all sorts of titles and every one of them dealt with the same problem – how we think. I was fascinated by his view of the place which logic holds in human behavior. It explained the economic theorists. The thing to do was to find out how they came to attack certain problems; why they took certain premises as a matter of course; why they did not consider all the permutations and variance of those problems which were logically possible; why their contemporaries thought their conclusions were significant. And, if one wanted to try his own hand at constructive theorizing, Dewey’s notion pointed the way. It is a misconception to suppose that consumers guide their course by ratiocination – they don’t think except under stress. There is no way of deducing from certain principles what they will do, just because their behavior is not itself rational. One has to find out what they do. That is a matter of observation, which the economic theorist had taken all too lightly. Economic theory became a fascinating subject – the orthodox types particularly – when one began to take the mental operations of the theorists as the problem, instead of taking their theories seriously.

Of course Veblen fit fitted perfectly into this set of notions. What drew me to him was his artistic side. I had a weakness for paradoxes – Hell set up by the God of love. But Veblen was a master developing beautiful subtleties, while I was a tyro emphasizing the obvious. He did have such a good time with the theory of the leisure class and then with the preconceptions of economic theory! And the economists reacted with such bewildered soberness! There was a man who really could play with ideas! If one wanted to indulge in the game of spinning theories who could match his skill and humor? But if anything were needed to convince me that the standard procedure of orthodox economics could meet no scientific tests, it was that Veblen got nothing more certain by his dazzling performances with another set of premises. His working conceptions of human nature might be a vast improvement; he might have uncanny insights; but he could do no more than make certain conclusions plausible – like the rest. How important were the factors he dealt with and the factors he scamped was never established.

That was a sort of problem which was beginning to concern me. William Hill set me a course paper on “Wool Growing and the Tariff.” I read a lot of the tariff speeches and got a new side-light on the uses to which economic theory is adapted, and the ease with which it is brushed aside on occasion. Also I wanted to find out what really had happened to wool growers as a result of protection. The obvious thing to do was to collect and analyze the statistical data. If at the end I had demonstrated no clear-cut conclusion, I at least knew how superficial were the notions of the gentlemen who merely debated the tariff issue, whether in Congress or in academic quarters. That was my first “investigation” – I did it in the way which seemed obvious, following up the available materials as far as I could, and reporting what I found to be the “facts.” It’s not easy to see how any student assigned this topic could do much with it in any other way.

A brief introduction to English economic history by A. C. Miller, and unsystematic readings in anthropology instigated by Veblen reinforced the impressions I was getting from other sources. Everything Dewey was saying about how we think, and when we think, made these fresh material significant, and got fresh significance itself. Men had always deluded themselves, it appeared, with strictly logical accounts of the world and their own origin; they had always fabricated theories for their spiritual comfort and practical guidance which ran far beyond the realm of fact without straining their powers of belief. My grand aunt’s theology; Plato and Quesnay; Kant, Ricardo and Karl Marx; Cairnes and Jevons, even Marshall were much of a piece. Each system was tolerably self-consistent – as if that were a test of “truth”! There were realms in which speculation on the basis of assumed premises achieved real wonders; but they were realms in which one began frankly by cutting loose from the phenomena can observe. And the results were enormously useful. But that way of thinking seem to get good results only with reference to the simplest of problems, such as numbers and spatial relations yet men practice this type of thinking with reference to all types of problems which could not be treated readily on a matter-of-fact basis – creation, God, “just” prices in the middle ages, the Wealth of Nations in Adam Smith’s time, the distribution of incomes in Ricardo’s generation, the theory of equilibrium in my own day.

There seem to be one way of making real progress, slow, very slow, but tolerably sure. That was the way of natural science. I really knew nothing of science and had enormous respect for its achievements. Not the Darwinian type of speculation which was then so much in the ascendant – that was another piece of theology. But chemistry and physics. They had been built up not in grand systems like soap bubbles; but by patient processes of observation and testing – always critical testing – of the relations between the working hypotheses and the processes observed. There was plenty of need for rigorous thinking, indeed of thinking more precise than Ricardo achieved; but the place for it was inside the investigation so to speak – the place that mathematics occupied in physics as an indispensable tool. The problems one could really do something with in economics were problems in which speculation could be controlled.

That’s the best account I can give offhand of my predilection for the concrete. Of course it seems to me rather a predilection for problems one can treat with some approach to scientific method. The abstract is to be made use of it every turn, as a handmaiden to help hew the wood and draw the water. I loved romances – particularly William Morris’ tales of lands that never were – and utopias, and economic systems, of which your father’s when I came to know it seemed the most beautiful; but these were objects of art, and I was a work man who wanted to become a scientific worker, who might enjoy the visions which we see in mountain mists but who trusted only what we see in the light of common day.

* * * *

            Besides the spice of rationalizing which doubtless vitiates my recollections – uncontrolled recollections at that – this account worries me by the time it is taking, yours as well as mine. I’ll try to answer the other questions concisely.

Business cycles turned up as a problem in the course of the studies which I began with Laughlin. My first book on the greenbacks dealt only with the years of rapid depreciation and spasmodic war-time reaction. I knew that I had not gotten to the bottom of the problems and wanted to go on. So I compiled that frightful second book as an apparatus for a more thorough analysis. By the time it was finished I had learned to see the problem in a larger way. Veblen’s paper on “Industrial and Pecuniary Employments” had a good deal to do with opening my eyes. Presently I found myself working on the system of prices and its place in modern economic life. Then I got hold of Simmel’s Theorie des Geldes – a fascinating book. But Simmel, no more than Veblen, knew the relative importance of the factors he was working with. My manuscript grew – it lies unpublished to this day. As it grew in size it became more speculative. I was working away from any solid foundation – having a good time, but sliding gaily over abysses I had not explored. One of the most formidable was the recurring readjustments of prices, which economists treated apart from their general theories of value, under the capitation “Crises.” I had to look into the problem. It proved to be susceptible of attack by methods which I thought reliable. The result was the big California monograph. I thought of it as an introduction to economic theory.

* * * *

            This conception is responsible for the chapter on “Modern Economic Organization.” I don’t remember precisely at what stage the need of such a discussion dawned upon me. But I have to do everything a dozen times. Doubtless I wrote parts of that chapter fairly early in other parts late as I found omissions in the light of the chapters on “The Rhythm of Business Activity.” Of course, I put nothing in which did not seem to me strictly pertinent to the understanding of the processes with which the volume dealt. That I did not cover the field very intelligently, even from my own viewpoint, appears from a comparison of the books published in 1913 and 1927. Doubtless before I am done with my current volume, I shall be passing a similar verdict upon the chapter as I left it last year.

* * * *

            As to the relation between my analytic description and “causal” theory I have no clear ideas – though I might develop some at need. To me it seems that I tried to follow through the inter-lacing processes involved in business expansion and contraction by the aid of everything I know, checking my speculations just as far as I can buy the data of observation. Among the things I “know” are the way in which economic activity is organized in business enterprises, and the way these enterprises are conducted for money profits. But that is not a simple matter which enables me to deduce certain results – or rather, to deduce results with certainty. There is much in the workings of business technique which I should never think of if I were not always turning back to observation. And I should not trust even my reasoning about what business men will do if I could not check it up. Some unverifiable suggestions do emerge; but I hope it is always clear that they are unverified. Very likely what I try to do is merely carrying out the requirements of John Stuart Mill’s “complete method.” But there is a great deal more passing back and forth between hypotheses and observation, each modifying and enriching the other, than I seem to remember in Mill’s version. Perhaps I do him injustice as a logician through default of memory; but I don’t think I do classical economics injustice when I say that it erred sadly in trying to think out a deductive scheme and then talked of verifying that. Until science has gotten to the stage of elaborating the details of an established body of theory – say finding a planet from the aberrations of orbits, or filling a gap in the table of elements – it is rash to suppose one can get an hypothesis which stands much chance of holding good except from a process of attempted verification, modification, fresh observation, and so on. (Of course, there is a good deal of commerce between most economic theorizing and personal observation of an irregular sort – that is what has given our theories their considerable measure of significance. But I must not go off into that issue.)

* * * *

           […] when writing the first book about business cycles I seem to have had no clear ideas about secular trends. The term does not appear to occur in the index. Seasonal variations appear to be mentioned only in connection with interest rates. Of course certain rough notions along these lines may be inferred; but not such definite ideas as would safeguard me against the errors you point out. What makes matters worse for me, I was behind the times in this respect. J. P. Norton’s Statistical Studies in the New York Money Market had come out in 1902. I ought to have known and make use made use of his work.

That is only one of several serious blemishes upon the statistical work in my 1913 volume. After Hourwich left Chicago, and that was before I got deep into economics, no courses were given on statistics in my time. I was blissfully ignorant of everything except the simplest devices. To this day I have remained an awkward amateur, always ready to invent some crude scheme for looking into anything I want to know about, and quite likely to be betrayed by my own apparatus. I shall die in the same sad state.

 

[…]

Ever yours,
Wesley C. Mitchell.
(Copy by J.M.C.)

 

Source: Columbia University Archives. Wesley Clair Mitchell Collection, Box 8 “Ch-Ec”, Folder “Clark, John Maurice: v.p., 8 Apr 1926 & 21 Apr 1927. To Wesley C. Mitchell 2 a.l.s. (with related material)”.

Image Source: Foundation for the Study of Cycles.

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Berkeley Columbia Economists

Columbia Ph.D. and Berkeley Professor, Charles Adams Gulick

In his review essay on Alexander Gerschenkron’s Economic Backwardness in Historical Perspective, Albert Fishlow wrote: “a decisive point in [Gerschenkron’s] career, was the invitation from Charles Gulick, a Berkeley professor whom he had earlier helped in his research in Austria, to come to the United States. His acceptance marked the real beginning of his academic career that subsequently was to flourish over the rest of his life.”

Besides being the scholar who brought Gerschenkron to the U.S., Charles Adams Gulick had a life-long research interest in labor policy from his 1924 Columbia Ph.D. dissertation to the international bibliography on labor movements linked below. His two-volume work Austria From Habsburg to Hitler (1948), into which flowed some 12 months of intensive research and writing input from Alexander Gerschenkron, was “the great achievement of his scholarly career” according to the memorial note reproduced below.

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History and Theories of Working-Class Movements: A Select Bibliography. Compiled by Charles A. Gulick, Roy A. Ockert and Raymond J. Wallace. Bureau of Business and Economic Research and Institute of Industrial Relations, University of California, Berkeley, 1955. 392 pages.

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Charles Adams Gulick, Economics: Berkeley
1896-1984
Professor Emeritus

Charles Gulick was born and raised in Texas and had all his schooling there through the M.A. degree. The Texas influence on his speech and certain mannerisms of expression remained with him all his life. Certainly at the University of Texas he acquired key elements of his life-long economic and social philosophy. It was the Progressive era and he became committed to central themes of that movement–that the great aggregations of power must be controlled and humanized and that a larger measure of social justice must be won for the less privileged members of society. Not surprisingly, his first monograph, published in 1920 when he was 24, was on the subject, Open Shop vs. Closed Shop.

Having majored in modern European history for the B.A. and M.A. degrees in Texas, he moved to Columbia University to major in economics for the Ph.D., awarded in 1924. At Columbia, he became strongly influenced by the ideas and interests of Professor Henry Seager, a leading academic writer on the widely debated issue of what to do about the power of the large, rapidly growing industrial and financial corporations commonly known as trusts. Combining his growing interest in labor subjects with his interest in trust problems, Gulick’s doctoral dissertation was published as Labor Policy of the U.S. Steel Corporation. While serving as an instructor in Economics at Columbia, he continued to work with Seager and later co-authored with him a large volume on Trust and Corporation Problems. He also edited a volume of Seager’s essays.

Gulick joined the faculty of the Berkeley Department of Economics in 1926, where he served until his retirement in 1963. It was in the course of a trip to Germany for research purposes in 1930 that he almost by accident paid a visit to Vienna and acquired the interest in Austria that led him eventually to the great achievement of his scholarly career, Austria From Habsburg to Hitler, published in 1948 in two volumes running to 1900 pages. The sub-titles that Gulick gave the two volumes, “Labor’s Workshop of Democracy” and “Fascism’s Subversion of Democracy,” are expressive of the book’s major themes and of his twin interests in the contributions labor movements can make to democratic society and in the anti-democratic forces that citizens of democracies must continuously fight against. The German translation of this work was published in Vienna in 1950 and immediately won a large readership and wide acclaim. In the same year, the city of Vienna awarded Gulick a prize for “distinguished achievement in moral sciences,” an honor not ordinarily accorded to non-Austrians. In the years since, the book has continued to be esteemed as one of the authoritative accounts of the first Austrian republic and in 1972 the President of Austria presented a gold medal to Gulick for “Services to the Republic.” A somewhat abbreviated German-language edition of the book was published in Austria in 1976 and a new printing of the original English edition was issued in 1980. In keeping with his long preoccupation with the fortunes of the labor movement and democracy in Austria, most of the articles he contributed to academic journals dealt with labor questions or political issues in that country.

While Gulick served conscientiously on a variety of Academic Senate and administrative committees, his primary campus interest was in teaching and working with students, and many generations of undergraduate and graduate students knew Gulick as a dedicated teacher and adviser and as a friend and supporter. He was generous of his time in meeting with individuals and with groups of students. He also felt a responsibility to help improve student writing. It was perhaps prophetic that his first academic appointment as a graduate student in Texas was as Tutor in English. He became widely known among his students for his practice of sprinkling the pages of their papers with notations or corrections concerning spelling, grammar, syntax, punctuation, and inaccurate quotations. He even enlisted his wife’s assistance in this work. He regularly held seminars in his home and he and his wife entertained students on many other occasions. It was appealing to students to find that Gulick shared many of their ideals for a good society and that he could voice in colorful language many of their criticisms of current social ills. An illustration of his outspokenness is his title for an article he wrote for a Vienna magazine after Ronald Reagan’s first election as governor of California, “The Political Landslide in California: Mass Lunacy, Fear and Hate.”

Charles Gulick died on August 27, 1984, leaving his wife, Esther, a daughter, two grandsons, and two great granddaughters.

Van Dusen Kennedy / Clark Kerr / Lloyd Ulman

 

Source: University of California History Digital Archives. University of California: In Memoriam, 1985, pp. 164-65.

Image Source: The Blue and Gold, 1922. University of California Yearbook.

 

 

Categories
Courses Harvard Socialism Syllabus

Harvard. Economics of Socialism. Overton Taylor et al., 1950

Joseph Schumpeter died January 8, 1950. His Harvard course “Economics of Socialism” scheduled to begin February 9th was taken over by Overton Taylor. In addition to lectures by Taylor, lectures were also given by Wassily Leontief, Walter Galenson, and Alexander Gerschenkron.

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[Original Course Announcement for Economics 111 in September 1949]

Economics 111 (formerly Economics 11b). Economics of Socialism

Half-course (spring term). Mon., Wed., and (at the pleasure of the instructor) Fri., at 10. Professor Schumpeter.

A brief survey of the development of socialist groups and parties; pure theory of centralist socialism; the economis of Marxism; applied problems.

 

Source: Harvard University. Final Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1949-50. Official Register of Harvard University, Vol. XLVI, No. 24, September, 1949, p. 79.

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[Course Enrollment, Economics 111, 1950 (Sp)]

[Economics] 111 (formerly 11b). Economics of Socialism. (Sp) Professor Schumpeter, Dr. O. H. Taylor and other Members of the Department.

6 Graduates, 13 Seniors, 6 Juniors, 3 Sophomores, 2 Public Administration, 2 Special: Total 32.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1949-1950, p. 72.

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1949-50
Economics 111
Socialism

I.   February 9 – March 14. Socialism and Marxism, Doctrine.

1.  February 9 – 14. Introduction; background of history of modern socialism; before Marx.

Reading due February 14: G. H. Sabine, History of Political Theory, Chs. 28, 29, 30, 32.

Th., Sat., February 9, 11. Lectures
Tu., Feb. 14. Section meeting. Discuss Sabine reading.

2. February 14 – 21. Hegel and Marx, and Marx’s sociology (theory of history).

Reading due February 21: Schumpeter, Capitalism, Socialism, and Democracy, Part I, and Ch. 24; Communist Manifesto; Marx, Preface to a Contribution to the Critique of Political Economy, p. 370; Marx-Engels, German Ideology, p. 209 (in Handbook of Marxism).

Th., Sat., February 16, 18. Lectures
Tu., February 21, Section. Discuss reading.

3. February 21-28. Ricardo and Marx, and Marx’s Economics I. Theory of Value and Surplus Value.

Reading due February 28: Sweezy, Theory of Capitalist Development, Part I.

Th., Sat., February 23, 25. Lectures.
Tu., February 28, Section, Discussion.

4. February 28 – March 7. Marx’s Economics II. Accumulation and Evolution of Capitalism

Reading due March 7: Sweezy, Chs. 5, 6, 8, 9, 10, 12.

Th., Sat., March 2, 4. Lectures, Taylor, Leontief.
Tu., March 7. Section, discussion.

5. March 7 – 14. Capitalism, Evolution, and Decline; Another View (Schumpeter).

Reading due March 14: Schumpeter, Capitalism, Socialism, and Democracy, Part II.

Th., Sat., March 9, 11, Lectures.
Tu., March 14, Section, discussion.

II.  March 16 – April 1. Socialist Parties, Ideas, and Policies –Theory and Practice – in Central Europe, Scandinavia, and England. Lecturers; Gerschenkron and Galenson.

6.  March 16 – 21. German and Austrian Developments after Marx and between the Two ‘World’ Wars. Gerschenkron.

Reading due March 21: Schumpeter, Capitalism, Socialism and Democracy, Part V, plus additional material to be announced.

Th., Sat., March 16, 18, Lectures.
Tu., March 21, Section, Discussion.

7. March 21 – 28. Scandinavian Socialism, Theory and Practice. Galenson.

Reading due March 28: to be announced.

Th., Sat., March 23, 25, Lectures.
Tu., March 28, Discussion.

8. March 28 – April 1. British Socialism, Theory and Practice. Galenson

Reading: Max Beer, History of British Socialism, Chs. to be announced.

 

April 2 – 9, inclusive, Spring Vacation

 

III. April 11 –29. Soviet Russia; Economic Planning in Centralist Socialism, Theory; and Russian Practice. Lecturers, Gerschenkron and Leontief.

9. April 11 – 15. Russia, Boshevism, Marx-Lenin-Stalin Theory, and Soviet Policies.

Reading due April 15: (1) Lange, Working Principles of Soviet Economy. (2) M. Dobb, Russian Economic Development, Chs. 13, 14..

Tu., Th., April 11, 13. Lectures, Gerschenkron.
Sat., April 15, Section, discussion.

10.   April 18 – 22. Centralist Socialism, Planning Theory.

Reading due April 22: (1) Lange-Taylor, On the Economic Theory of Socialism; (2) Bergson, Survey of Contemporary Economics, Edited by Ellis, Ch. 12.

Tu., Th., April 18, 20, Lectures, Leontief.
Sat., April 22, Section, Discussion.

11. April 25 – 29. Russian Practice; and the Modern Marxist Theory of ‘Monopoly Capitalism and Imperialism’ (Not related topics).

Tu., April 25, Lecture by Leontief; Economics of Planning and Russian Practice.
Th., Sat., April 27, 29. Taylor, Lectures: ‘Monopoly, Capitalism and Imperialism,’ Marx-Lenin Theory.

Reading. Sweezy, Part IV.

12. May 2 — 6. ‘Imperialism’ Theory, Cont’d.

Reading. Sweezy, Part IV, and Schumpeter, Chapters to be announced.

 

[handwritten additions]

40 students

Perlman – Theory of Labor [Movement].

Gulick Vienna Taxes since 1918, Political Science Quarterly. December, 1938

Charles A. Gulick Jr. How Fascism came to Austria. University Toronto Quarterly Jan 1939

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 4, Folder “Economics, 1949-1950 (1 of 3)”.

Categories
Courses Harvard Syllabus

Harvard. Economic Theory II. Leontief, 1947-48

The second graduate course in economic theory, Economics 202a and 202b, at Harvard in 1948-49 taught by Leontief were renumbered versions of the courses taught by Leontief in 1947-48 that are posted below. I was struck by the significant reorganization of the course content between the two versions so I thought it would be useful to make both syllabi available at Economics in the Rear-View Mirror.

Being someone who almost never manages to get an entire syllabus decided by the start of the semester for a new course, I was reassured to see that Leontief appears also to have engaged in some just-in-time delivery of his semester reading assignments.

Also interesting to see chapters from John Rae’s 1834 book as assigned reading.

The first graduate course in economic theory was taught by Chamberlin in 1947-48.

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[Course Enrollments, Economics 102a and 102b, 1947-48]

 

[Economics] 102a. Professor Leontief. Economic Theory, II (F).

41 Graduates, 1 Senior, 1 Sophomore, 20 Public Administration, 7 Radcliffe: Total 84.

[Economics] 102b. Professor Leontief. Economic Theory, II (Sp).

28 Graduates, 11 Public Administration, 5 Radcliffe, 1 Other: Total 45.

 

Source: Harvard University. Report of the President of Harvard College and Reports of the Departments for 1947-48, p. 90.

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Economics 102a
Economic Theory
Fall Term, 1947-48

Readings until November 10

Theory of Production

Douglas, Paul: Theory of Wages, Chs. I – IX

Fisher, I. : A Three-Dimensional Representation of the Factors of Production and Their Remuneration Marginally and Residually, Econometrica, Oct., 1939

Cassel, J.: Law of Variable Proportions [in] Readings in the Theory of Income Distribution

Durand, D.: Some Thoughts on Marginal Productivity, Journal of Political Economy, Dec., 1937.

Reder, M. W.: An Alternative Interpretation of the Cob-Douglas Function, Econometrica, July-Oct., 1943.

Bronfenbrenner, M.: Production Functions: Cobb-Douglas, Interfirm, Intra-firm, Econometrica, Jan., 1944.

Kalecki, M.: The Distribution of National Income [in] Readings in the Theory of Income Distribution.

Lange, O.: Note on Innovations, Review of Economic Statistics, Feb., 1943. [in] Readings in the Theory of Income Distribution

Hicks, J.: Distribution and Economic Progress, Review of Economic Studies, Oct., 1936.

Bloom, G.: Technical Progress, Cost and Rent, Economica, Feb., 1942.

For General Reference

Hicks, J. R.: Theory of Wages

Lerner, A. P.: Economics of Control

Boulding: Economic Analysis

Selected Problems in the Analysis of Demand

Marshall, A.: Principles, Book II, Ch. 2.

Knight, F.: Ethics and the Economic Interpretation in Ethics of Competition

N.R.C.: Consumption Expenditure in U.S., Appendix C

Stone, J. R.: The Marginal Propensity to Consume: A Statistical Investigation, Review of Economic Studies, Oct., 1938.

Centers and Cantril, Income Satisfaction and Income Aspirations, Journal of Abnormal and Social Psychology, Vol. XLI, No. 1.

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Economics 102[a]
Fall Term, 1947-48

Reading, November 10 – January 4

 

  1. Samuelson, Welfare Economics, Chapter VIII [in Foundations of Economic Analysis]
  2. De Scitovszky, “Note on Welfare Propositions in Economics,” Review of Economic Studies, November 1941.
  3. Hicks, “Foundations of Welfare Economics, Economic Journal, 1939.
  4. P. Lerner, The Economics of Control, Chs. 9, 15 and 16.
  5. Meade and Fleming, “Price and Output Policy of State Enterprise,” Economic Journal, 1944.
  6. Coase, “The Marginal Cost Controversy,” Economica, August, 1946.
  7. Troxel, “Incremental Cost Determination of Public Utility Prices,” Journal of Land and Public Utilities Economics, November, 1942.
  8. Troxel, “Limitations of Incremental Cost Patterns of Pricing,” Journal of Land and Public Utilities Economics, February, 1943.
  9. Troxel, “Incremental Cost Control under Public Ownership,” Journal of Land and Public Utilities Economics, August, 1943.
  10. H. Phelps Brown, Framework of the Pricing System.

Reading Period Assignment

Oscar Lange, Price Flexibility and Employment

or (for those who know some calculus)

Paul Samuelson, Foundations of Economic Analysis, Chs. IV. and V.

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Economics 102b
Spring Term, 1948
Capital, Interest, and Economic Development

Part I: Capital and Income:

National wealth: Stock and flow concepts. Dollar measures and physical measures. Capital and income. Capital in production. Depreciation and obsolescence. Period of production and the speed of turnover. The time shape of production and consumption process.

Reading:

Simon Kuznets, “On Measurement of National Wealth,” Studies in Income and Wealth, Vol. 2 National Bureau of Economic Research, New York, 1938, pp. 3-61.

Simon Kuznets, “National Product since 1869,” Reproducible Wealth—Its Growth and Industrial Distribution, Part IV, National Bureau of Economic Research, New York, 1946, pp. 185-234.

John Rae, New Principles of Political Economy, 1834, Chs. I-V.

Irving Fisher, Nature of Capital and Income, Chs. I, IV, V, XIV, XVII, Macmillan, New York, 1906.

Nicolas Kaldor, “Annual Survey of Economic Theory, “The Recent Controversy on the Theory of Capital, Econometrica, July, 1937, pp. 201-233.

 

Part II: Theory of Interest:

Productivity of Capital. Expectations, risk, and uncertainty. Inventory speculation. Interest as cost and the demand for capital. Saving and the supply of capital. Monetary theory of interest. Theory of assets.

Reading: Will be assigned later.

 

Part III: Economic Development and Accumulation of Capital:

Statics and Dynamics. The general problem of economic growth. Saving, investment, and the growth of income. Acceleration principle. Technical change. Accumulation and employment.

Reading: Will be assigned later.

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Economics 102b
Spring Term, 1948
Capital, Interest, and Economic Development

Part II: Theory of Interest:

Productivity of Capital. Expectations, risk, and uncertainty. Inventory speculation. Interest as cost and the demand for capital. Saving and the supply of capital. Monetary theory of interest. Theory of assets.

Reading:

Irving Fisher, The Theory of Interest, chapters. VII, VIII, IX, X, XI, XVI, XVII, and XVIII. 1930.

Readings in Theory of Income Distribution, Blakiston, Philadelphia, 1946.

Frank Knight, “Capital and Interest,” pp. 384-417.

John M. Keynes, “The Theory of the Rate of Interest,” pp. 418-424.

D. H. Robertson, “Mr. Keynes and the Rate of Interest”, pp. 425-460.

 

Part III: Economic Development and Accumulation of Capital:

Statics and Dynamics. The general problem of economic growth. Saving, investment, and the growth of income. Acceleration principle. Technical change. Accumulation and employment.

Reading:

Bresciani-Turoni, “The Theory of Saving”, Economica, Part I, February 1936, pp. 1-23; Part II, May 1936, pp. 162-181.

Domar, “Expansion and Employment”, American Economic Review, March 1947, pp. 34-55.

Schelling, “Capital Growth and Equilibrium”, American Economic Review, December 1947, pp. 864-876.

Harrod, “An Essay in Dynamic Theory”, Economic Journal, March 1939, pp. 14-33.

Pigou, “Economic Progress in a Stable Economy”, Economica, August 1947, pp. 180-188.

Stern, “Capital Requirements in Progressive Economies”, Economica, August 1945, pp. 163-171.

A. Sweezy, “Secular Stagnation?” In Harris, Postwar Economic Problems, McGraw-Hill, New York, 1943, pp. 67-82.

Hansen, “Economic Progress and Declining Population Growth”, American Economic Review, March 1939, pp. 1-15.

de Scitovsky, “Capital Accumulation, Employment, and Price Rigidity”, Review of Economic Studies, February 1941, pp. 69-88.

Reading: Schumpeter, Theory of Economic Development, Harvard University Press, Cambridge, 1936.,

 

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1) Box 4, Folder “Economics, 1947-1948 (2 of 2)”.

 

 

 

Categories
Courses Curriculum Harvard

Harvard. Mathematical Economics, 1933-37

In the Spring of 1933 Joseph Schumpeter got the ball rolling for a project to introduce an introductory course in mathematical economics at Harvard. I include here first a memo from statistics professor W. L. Crum to the economics department chair, Professor H. H. Burbank. This is followed by the subsequent proposal signed by six professors (Burbank, Chamberlin, Crum, Mason, Schumpeter and Taussig), presumably sent to some university level curriculum approval committee. From the enrollment records included below we see that 23 people attended that class in the first term of 1933-34. Starting the following academic year the course was taught by Leontief and a new course “primarily for Graduates”, “Mathematical Economics”, was introduced by Professor E. B. Wilson. Course descriptions and enrollments through 1936-37 are included in this posting. Here is an interesting 1936 letter from E. B. Wilson to Columbia’s W. C. Mitchell about what Schumpeter has wrought with economics in the curriculum.

An update with additional material for this course has been included in a later post.

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Memorandum for Professor Burbank

4 April 1933

  1. I discussed, at his request, the mathematical economics project with Professor Schumpeter last Friday. I will give further consideration to his suggestions, and to the conversations I have had with you on the same subject; and then I will write out, for discussion with you, an outline of my thoughts on the matter.
  1. In the meantime, I am making a specific suggestion with reference to one of the points you raised earlier. You indicated that it might be desirable for those officers interested in mathematical economics to get together as a group and discuss prospects. As things are developing rapidly it seems to me that such a committee (perhaps informal) could well be set up promptly. I hope you will feel that you can meet with the group and act as its chairman. If you cannot, I suggest Professor Schumpeter be asked to head the group. I suggest that its members include also: Professor Black (I think it very desirable that he be brought in early), Professor Wilson, and me. I think it well that this original group be empowered to add shortly the following: Professor Frickey, Dr. Leontief, and Professor Chamberlin (or one of the other interested younger men).

[Signed]
WLC

 

Source: Harvard University Archives. Department of Economics, Correspondence & Papers, 1902-1950. (UAV.349.10) Box 23, Folder “Course Administration: 1932-37-40”.

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Tentative Proposals for a Course on the Elements of Mathematical Economics to be Given during the Winter Term

The advanced student who is interested in the mathematical aspects of our subject has had in most cases some mathematical training and can be taken care of individually. But something should be done to acquaint a wider circle of less advanced students, or even of beginners, with those fundamental concepts of mathematics which are necessary to understand, say, Marshall’s Appendix and the more important and more accessible parts of the literature of mathematical economics, such as the works of Cournot, Walras, Edgeworth, and a few others. Since the necessary minimum of mathematics can be procured with little expenditure of time and energy, the experiment is proposed of importing this modicum of information to such graduate and undergraduate students as may wish to have it–subject to the approval of tutors in the case of undergraduates.

A half-course two hours a week would meet the case. Since any teaching of mathematics must work with examples if it is to convey any meaning, these examples will be drawn from economic problems. The course, therefore, should not be simply one on “mathematics for economists” but rather on “mathematical theory of economics.” Discussion will cover a number of simple and fundamental problems of economic theory, the mathematical concepts being explained as they present themselves. In the first term the whole venture will be frankly experimental. Coöperation and critique from all members of the economic staff is cordially invited. The final shape of this addition to our offering should, through common effort, be evolved during the next term. The following list is suggested of mathematics subjects with which it is proposed to deal in which seem to be both necessary and sufficient. The economic problems from which, and in connection with which, these mathematical topics are to be developed are merely the time-honored problems of marginal analysis.

(1) The fundamental concepts of analytic geometry, coordinates, transformations, equations of straight-line and curves, tangents, and so forth.

(2) Some fundamental notions of algebra, the theory of equations, forms, matrices, determinants, vectors, and vectorial operations.

(3) The concept of the integral and some of its applications, definite integrals, multiple integrals, and multiple integrals in polar coordinates.

(4) Functions and limits, differential coefficients, the elementary differential operations, maxima and minima, partial differentiations, developments, Taylor series.

(5) Simplest elements of the theory of differential equations. Functional equations and here and there some simple and useful tools from other mathematical fields as occasions may arise.

The course should be open to all who are interested, and participation of those wishing to follow it as auditors will be welcomed. It is highly desirable that as many tutors as possible should be present at the sessions of the first experimental term in order to contribute their advice, so that in the future the course may embody those topics and methods of present presentation which are found to be useful.

 

April 1933

H. H. Burbank
E. H. Chamberlin
W. L. Crum
E. S. Mason
J. A. Schumpeter
F. W. Taussig

Source: Harvard University Archives. Department of Economics, Correspondence & Papers, 1902-1950. (UAV.349.10) Box 23, Folder “Course offerings 1926-1937”.

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1933-1934

[Courses offered]

Economics 8a 1hf. Introduction to the Mathematical Treatment of Economic Theory

Half-course (first half-year). Mon. 4 to 6, and a third hour at the pleasure of the instructor. Professor Schumpeter, and other members of the Department.

Economics 8a is open to those who have passed Economics A and Mathematics A, or its equivalent. The aim of this course is to acquaint such students as may wish it with the elements of the mathematical technique necessary to understand the simpler contributions to the mathematical theory of Economics.

Source: Harvard University. Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1933-34, 2n ed., p. 126.

 

[Course Enrollment]

[Economics] 8a 1hf. Professor Schumpeter and other members of the Department. — Introduction to the Mathematical Treatment of Economic Theory.

15 Graduates, 3 Seniors, 5 Instructors. Total 23.

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1933-1934, p. 85.

__________________________________

 

1934-35

[Courses offered]

Economics 8a 1hf. Introduction to the Mathematical Treatment of Economic Theory

Half-course (first half-year). Mon. 4 to 6, and a third hour at the pleasure of the instructor. Professor Schumpeter.

Economics A and Mathematics A, or their equivalents, are prerequisites for this course.

Economics 13b 2hf. Mathematical Economics

Half-course (second half-year). Tu., Th., 3 to 4.30. Professor E. B. Wilson.

Arrangements for admission should be made with the Chairman of the Department
Omitted in 1935-36.

Source: Harvard University. Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1934-35, 2n ed., p. 126-7.

 

[Course Enrollments]

[Economics] 8a 1hf. Professor Schumpeter. — Introduction to the Mathematical Treatment of Economic Theory.

2 Seniors, 1 Junior, 1 Sophomore. Total 4.

[Economics] 13b 2hf. Professor E. B. Wilson. — Mathematical Economics.

2 Graduates, 1 Junior, Total 3.

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1934-1935, p. 81.

__________________________________

 

1935-1936

[Course offered]

Economics 8a 2hf. Introduction to the Mathematical Treatment of Economic Theory

Half-course (second half-year). Mon. 4 to 6. Assistant Professor Leontief.

Economics A and Mathematics A, or their equivalents, are prerequisites for this course.

 

[Economics 13b 2hf. Mathematical Economics]

Half-course (second half-year). Tu., Th., at 2. Professor E. B. Wilson.

Arrangements for admission should be made with the Chairman of the Department
Omitted in 1935-36.

Source: Harvard University. Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1935-36, 2nd ed., p. 138-9.

 

[Course Enrollment]

[Economics] 8a 2hf. Professor Leontief. — Introduction to the Mathematical Treatment of Economic Theory.

4 Juniors, 2 Sophomores. Total 6.

 

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1935-1936, p. 82.

__________________________________

 

1936-1937

[Courses offered]

Economics 4a 2hf. (formerly 8a) Introduction to the Mathematical Treatment of Economic Theory

Half-course (second half-year). Mon. 4 to 6. Assistant Professor Leontief.

Economics A and Mathematics A, or their equivalents, are prerequisites for this course.

Economics 104b 2hf. (formerly 13b). Mathematical Economics

Half-course (second half-year). Tu., Th., at 2. Professor E. B. Wilson.

Arrangements for admission should be made with the Chairman of the Department

Source: Harvard University. Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1936-7, 2nd ed., p. 140, 142.

 

[Course Enrollments]

[Economics] 4a 2hf. Professor Leontief. — Introduction to the Mathematical Treatment of Economic Theory.

1 Graduate, 2 Seniors, 3 Juniors, 2 Sophomores, 1 Other. Total 9.

[Economics] 104b 2hf. (formerly 13b) Professor E. B. Wilson. — Mathematical Economics.

2 Graduates. Total 2.

Source: Harvard University. Report of the President of Harvard College and Reports of Departments for 1936-1937, pp. 92,93.

Image Source: Schumpeter, Leontief, Wilson from Harvard Album, 1934, 1939.

 

 

Categories
ERVM

First year anniversary of Economics in the Rear-View Mirror

Today marks the first anniversary of Economics in the Rear-View Mirror.  It was conceived as a boutique blog/website that provides transcriptions of material bearing on the education of economists in the United States up to the 1950s. During this first year I have provided postings of some 265 “artifacts” that have attracted over 16,000 page visits between them.

The ten most frequented postings over the year have been the following:

  1. Harvard. Econ 113b. Schumpeter’s Grad Course on the History of Economics. 1940.
  2. Harvard. Advanced Economic Theory, Schumpeter, 1941-42.
  3. Chicago. Undergraduate Macro. Stanley Fischer, 1973.
  4. Chicago. Undergraduate grade distribution in economics, 1925-26 and 1926-27.
  5. Harvard Economics. Economics 101. Econ Theory. Chamberlin, 1938-9.
  6. Chicago Economics. Reading Assignments, Economic Theory (Econ 301). Viner, Fall 1932.
  7. MIT. Final Exam in Graduate Macro I. Stanley Fischer, 1975.
  8. Harvard. Schumpeter’s Socialism Course. Syllabus and Exam, 1946.
  9. Chicago. Economic Theory Exams, A.M. and Ph.D. Summer 1949.
  10. Harvard Economics. Hansen and Williams Fiscal Seminar 1937-1944.

There are many other artifacts that have attracted much less attention and I can only encourage visitors to Economics in the Rear-View Mirror to use the search function, check the menu, click on the categories listed at the end of each posting to explore the collection. Here I just provide a small set of unordered links to artifacts that have received less notice but that I think should be of great interest to those with a deep interest in the history of economics.

Again I really need to thank the Institute for New Economic Thinking for having provided me a grant to collect much of these materials. Also I have received much encouragement from numerous colleagues across our fair planet and I look forward to feedback from page visitors, regular and irregular.