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Chicago Courses Economists

Chicago. Undergraduate Macro. Stanley Fischer, 1973

While organizing my material from George Stigler’s papers, I ran across this reading list for an undergraduate macro course taught in 1973 at the University of Chicago by the then thirty year-old future professor of the so-called MIT gang that included Ben Bernanke, Mario Draghi, Olivier Blanchard, Maurice Obstfeld, and Paul Krugman (yes, there were others… worth another post). Learn this stuff (and I mean really learn this stuff) and you too might become chief economist of the World Bank, or first managing director of the IMF, or vice chairman of Citigroup, or governor of the Bank of Israel, or Vice Chairman of the Fed. Excuse me, I mean “and/or”.

_____________________________

Winter 1973

Stanley Fischer

ECONOMICS 202
Reading List

Texts:

Branson: Macroeconomic Theory and Policy, Harper and Row, 1972.

Friedman: An Economist’s Protest, Thomas Horton, 1972.

 

I. Introductory

Friedman, M. “A Theoretical Framework for Monetary Analysis,” JPE, March/April, 1970, 193-238.

Johnson, H. G. “The Keynesian Revolution and the Monetarist Counter-Revolution,” AER Papers and Proceedings, May, 1971, 1-14.

Leijonhufvud, A. “Keynes and the Classics: Two Lectures on Keynes’ Contribution to Economic Theory,” London, Institute of Economic Affairs, 1969. Occasional Paper 30.

Tobin, J. Manuscript on Monetary Theory, Chapter 1. (This is on reserve in the library.)

 

II. Quantity Equation

Fisher, I. The Purchasing Power of Money, Macmillan, 1913, Chaps. 1, 2, 3, 4, 8.

Keynes, J. M., Tract on Monetary Reform, Macmillan, 1924, Chaps. 2, 3.

Patinkin, D. “The Chicago Tradition, the Quantity Theory, and Friedman,” JMCB, Feb., 1969, 46-70.

Pigou, A. C. “The Value of Money,” originally in Quarterly Journal of Economics, 1917, reprinted in Lutz and Mints.

 

III. The Demand for Money

Baumol, W. J. “The Transactions Demand for Cash: An Inventory Theoretic Approach,” QJE, Nov., 1952, reprinted in Thorn.

Cagan, P. “The Monetary Dynamics of Hyperinflation” in Studies in the Quantity Theory of Money, M. Friedman (ed.), University of Chicago Press, 1956.

Friedman, M. “The Quantity Theory of Money: A Restatement,” in OQM (also in Thorn and in Studies in the Quantity Theory of Money).

Keynes, J. M. The General Theory of Employment, Interest and Money, Macmillan, 1935, Chaps. 13, 15, 17.

Laidler, D. E. W. “Some Evidence on the Demand for Money,” JPE, Feb., 1966, 55-68.

Latané, H. A. “Cash Balances and the Interest Rate—A Pragmatic Approach,” RE and Sta., Nov., 1954, 456-60.

Tobin, J. “Liquidity Preference as Behavior Toward Risk,” RES, Feb., 1958, 65-86, reprinted in Thorn.

 

IV. The Supply of Money

Cagan, P. Determinants and Effects of Changes in the Money Stock, 1875-1960, Columbia University Press, 1965.

 

V. Inflation

Friedman, M. “The Role of Monetary Policy, “ AER, March 1968, 1-17, reprinted in OQM.

Phillips, A. W. “The Relation between Unemployment and the Rate of Change of Money Wages in the U.K., 1862-1957,” Economica, Nov., 1958, 283-99.

_____________________________

[References completed]

Lutz and Mints.   Lutz, Friedrich A. and Mints, Lloyd W. Readings in Monetary Economics.Volume 5 of The series of republished articles on economics. R.D. Irwin, 1951.

Thorn. [probably] Money and banking: theory, analysis, and policy; a textbook of readings. Edited with introd. by S. Mittra. [Consulting editor: Richard S. Thorn]. New York, Random House [1970]

OQM. Friedman, Milton. Optimum Quantity of Money and Other Essays. New Brunswick, NJ: Transaction Publishers, 1969.

_____________________________

Source: Source: Stigler, George. Papers, Box 3, Folder “U of C Other, Miscellaneous, Corresp. w. Pres., etc”, Special Collections Research Center, University of Chicago Library.

 

Image Source: MIT Museum.

 

Categories
Economists Funny Business

Old David Hume, New iMac

 

 

Teaching the History of Economics frequently involves dressing dead economists in 21st century attire. Here my attempt at adding a new twist to the sport at David Hume’s expense. I truly hope he isn’t spinning in his Mausoleum because of me. For Hume fans the original drawing by Louis Carrogis can be viewed here.

 

iMacHume

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Chicago Courses

Chicago. Imperfect Competition (Econ 307) Reading List. Lange, 1941

Today’s posting  comes from Norman M. Kaplan’s student notes from his graduate studies: a carbon copy of the reading list for Oskar Lange’s course at the University of Chicago given in the Autumn Quarter of 1941.

The Course description from the 1941-42 course announcements:

307. Imperfect Competition.—A study of price formation and production under various transitional forms between perfect competition and pure monopoly, such as monopolistic and monopsonistic competition, noncompeting groups, oligopoly and bilateral monopoly. The problem of equilibrium under such forms. Noncompeting groups and social structure. Application of the theory to the study of distribution of incomes, collective bargaining, excess capacity, price rigidity, and business cycles. Imperfect competition and economic policy. Prerequisite: Economics 301 or equivalent. Summer, 9:00; Autumn, 1:30; Lange.

Source: University of Chicago. Announcements of the College and the Divisions for the Sessions of 1941. Vol. XLI, No. 10 (April 25, 1941), p. 307.

_______________________________________

ECONOMICS 307
Autumn, 1941

 

E. Chamberlin. The Theory of Monopolistic Competition

Joan Robinson. Economics of Imperfect Competition

Roy F. Harrod. “Doctrines of Imperfect Competition,” QJE (May 1934)

G. Stigler. “Notes on the Theory of Duopoly,” JPE (Sept. 1940)

A. C. Pigou. Economics of Stationary States. Chap. 14-19, 23, 40-44

R. Triffin. Monopolistic Competition and General Equilibrium Theory.

Testimony of Frank Fetter before TNEC. Hearings before TNEC, Part 5

N. Kalder. “The Equilibirum of the Firm” Econ. J. (1934)

__________. “Monopolistic Competition and Excess Capacity,” Economica (Feb 1935)

P. Sweezy. “Demand under Conditions of Oligopoly,” JPE (Aug 1939)

R. L. Hall and C. J. Hitch. Price Theory and Business Behavior. Oxford Economic Papers No. 2, May, 1939

M. W. Reder. “Inter-Temporal Relations of Demand and Supply within the Firm,” Canadian J. of Economics and Political Science (Feb 1941)

H. Smith. “Advertising Cost and Equilibrium,” RES (Oct 1934)

G. Tintner. “Note on the Problem of Bilateral Monopoly,” JPE (1939)

M. Bronfenbrenner. “The Economics of Collective Bargaining,” QJE (Aug. 1939

Turner. “Theory of Industrial Disputes,” RES (Feb 1934)

G. Tintner. “Note on the Problem of Bilateral Monopoly,” JPE (1939)

M. Bronfenbrenner. “The Economics of Collective Bargaining,” QJE (Aug. 1939)

Turner. “Theory of Industrial Disputes,” RES (Feb 1934)

A. P. Lerner. “The Concept of Monopoly and Measurement of Monopoly Power,” RES (Feb 1934)

____________. “From Vulgar Political Economy to Vulgar Marxism,” JPE (Aug 1939)

M. Kalecki. Studies in Theory of Economic Fluctuations. Chap. 1.

 

Optional

J. E. Meade. An Introduction to Economic Analysis and Policy, part II

E. A. G. Robinson. Structure of Competitive Industry.

F. Zeuthen. Problems of Monopoly and Economic Warfare, part 4.

F. Harrod. Price and Cost in Entrepreneur’s Policy. Oxford Economic Papers No. 2, May, 1939.

S. Nelson and W. G. Keim. Price Behavior and Business Policy. TNEC Mon. No. 1

Report of the Federal Trade Commission on Monopolistic Practices in Industry, Hearings before TNEC, part 5A

R. Triffin. “Monopoly in Particular and General Equilibrium Economics,” Econometrica (April 1941)

M. W. Reder. “Monopolistic Competition and the Stability Conditions,” RES (Feb 1941)

R. Shone. “Selling Costs,” RES (June 1935)

E. Hoover. “Spatial Price Discrimination,” RES (June 1937)

J. R. Hicks. “The Theory of Monopoly,” Econometrica, 1935

H. Hotelling. “Stability in Competition,” Econ. J., 1929

M. Bronfenbrenner. “Application of the Discontinuous Oligopoly Demand Curve,” JPE (June 1940)

R. H. Coase. “Some Notes on Monopoly Price,” RES (Oct. 1937)

Structure of the American Economy, chaps. 7, 8, 9

J. Robinson. “What is Perfect Competition?” QJE, 1934

E. Chamberlin. “Monopolistic or Imperfect Competition,” QJE, 1937

N. Kaldor. “Professor Chamberlin on Monopolistic and Imperfect Competition,” QJE, 1938

R. F. Kahn. “Some Notes on Ideal Output,” Econ. J, 1935

_______________________________________

Source: Kaplan, Norman Maurice. Papers, Box 2, Folder 7, Special Collections Research Center, University of Chicago Library

Image Source: Hoover Institution Archives. Papers of Yzgmunt Berling, Box 2. Lange is the civilian in the front left, soon to be General Yzgmunt Berling is the uniformed man on the right. The picture is from 1943.

 

 

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Chicago Columbia Cornell Harvard Michigan Pennsylvania Research Tip Salaries

Professors’ and Instructors’ Salaries, ca. 1907

Some 103 colleges and universities in the United States and Canada provided useable answers to a survey of higher educational institutions having annual instructional salary budgets of over $45,000 (note assistant professors at the time cost about $2,000 per year) conducted by the Carnegie Foundation for the Advancement of Teaching. Results were published in 1908 (the Preface is dated April 1908), so we can reasonably presume the information reported is either from budgetary data for the academic year 1907-08 or for the academic year 1906-07. The 101 page Bulletin even went on to present data for professorial incomes in Germany!

As the entire Carnegie Foundation Bulletin can be downloaded, this posting is more of a research tip/teaser. I present below an excerpt for the top ten universities (out of 103), ranked by their annual appropriations for the salaries of instructional staff.

Plucking two sentences in lieu of an executive summary, I offer the following quotes from the Bulletin:

“Good, plodding men, who attend diligently to their profession [law, medicine and engineering are meant here] but who are without unusual ability, often obtain in middle life an income considerably higher tthan a man of the greatest genius can receive in an American professor’s chair.” [p. 25]

“A German who possesses such ability that he may expect in due time to become a full professor and who prepares himself for university teaching must expect to study until the age of thirty with no financial return, to study and teach as a docent till nearly thirty-six with an annual remuneration of less than $200, and to teach from thirty-six to forty-one with an annual remuneration of from $600 to $2,000, by which time he may become a full professor and will continue to receive his salary until his death [my emphasis]…If he succeeds… he may hope for a much larger reward and be assured of security in old age.” [p. vii]

____________________________

Average Salaries for Ranks, Age at Start of Rank, Student-Instructor Ratios

Columbia Harvard Chicago Michigan Yale
Total annual income
(thousands of dollars)
1.675 1.828 1.304 1.078 1.089
Annual Appropriation for Salaries of Instructing Staff
(thousands of dollars)
1.145 .842 .699 .536 .525
Average Salary of Professor $4,289 4,413 $3,600 $2,763 $3,500
Average Age at Entrance to Grade of Professor 37.5 39 35
Average Salary of Associate Professor $3,600 $2,800 $2,009
Average Age at Entrance to Grade of Associate Professor
Average Salary of Assistant Professor $2,201 $2,719 $2,200 $1,624 $2,000
Average Age at Entrance to Grade of Assistant Professor 32 33 29
Average Salary of Instructor $1,800 $1,048 $1,450 $1,114 $1,400
Average Age at Entrance to Grade of Instructor 29 28 24
Average Salary of Assistant $500 $347 $666
Average Age at Entrance to Grade of Assistant 24 26 23
Total Number of Students in University 4,087 4,012 5,070 4,282 3,306
Total Instructing Staff in University 559 573 291 285 365
Ratio 7.3 7 17.4 15 9
Total Number of Students in Undergraduate Colleges and Non-professional Graduate Schools 2,545 2,836 3,902 2,899 2,620
Total Instructing Staff in Undergraduate Colleges and Non-professional Graduate Schools 253 322 211 198 236
Ratio 10 8.8 18.4 14.6 11.1

 

Average Salaries for Ranks, Age at Start of Rank, Student-Instructor Ratios

Cornell Illinois Wisconsin Pennsyl-vania UC Berkeley
Total annual income
(thousands of dollars)
1.083 1.200 .999 .589 .844
Annual Appropriation for Salaries of Instructing Staff
(thousands of dollars)
.511 .492 .490 .433 .408
Average Salary of Professor $3,135 $2,851 $2,772 $3,500 $3,300
Average Age at Entrance to Grade of Professor 32.8
Average Salary of Associate Professor $2,168 $2,081 $2,200
Average Age at Entrance to Grade of Associate Professor 29.6
Average Salary of Assistant Professor $1,715 $1,851 $1,636 $1,850 $1,620
Average Age at Entrance to Grade of Assistant Professor 28.6
Average Salary of Instructor $924 $1,091 $1,065 $1,000 $1,100
Average Age at Entrance to Grade of Instructor 27.5
Average Salary of Assistant  … $660 $542 $650 $850
Average Age at Entrance to Grade of Assistant 24.5
Total Number of Students in University 3,635 3,605 3,116 3,700 2,987
Total Instructing Staff in University 507 414 297 375 350
Ratio 7.1 8.7 10.4 9.8 8.5
Total Number of Students in Undergraduate Colleges and Non-professional Graduate Schools 2,917 2,281 2,558 2,618 2,451
Total Instructing Staff in Undergraduate Colleges and Non-professional Graduate Schools 283 190 231 166 218
Ratio 10.3 12 11 15.7 11.2

 

[From the table notes:]

“The grade of associate professor is only given when there is also the distinct grade of assistant professor in the same institution; otherwise the associate professor is classed throughout this discussion as an assistant professor.

Professors who are heads of departments received on an average $5,800 at the University of Chicago.

Figures for Cornell do not include the medical school.

 

Source: Table II in The Financial Status of the Professor in America and in Germany. The Carnegie Foundation for the Advancement of Teaching, Bulletin Number Two. New York City, 1908, pp. 10-11.

Image Source: Website of the Carnegie Foundation.

P.S. A list of all Carnegie Foundation Publications.

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Columbia Curriculum

Burgess on Political Sciences at Columbia College. 1882

A brief statement that well describes the System of instruction and research in the political sciences at Columbia by the founder of its School of Political Science at the dawn of formal graduate education in economics (as well as history and public law) in the United States. College through the Junior Year was regarded as equivalent to the Gymnasium training, i.e. pre-University, in the German system. The Senior year of undergraduate education marked the transition to University study. Cf.  the informational brochure for the academic year 1882-83.

_____________________

THE STUDY OF THE POLITICAL SCIENCES IN COLUMBIA COLLEGE.

[1882]
John W. Burgess

During the last half decade an awakening of interest in the study of the political sciences has manifested itself throughout the public at large, such as no previous generation since the beginning of our national existence has experienced. The conviction is now already deep and general that, unless a sounder political wisdom and a better political practice be attained, the republican system may become but a form, and republican institutions but a deception. It is then hardly a question any more as to whether we need a higher political education. The common consciousness of the nation is already beyond that point, and is now occupied with the invention of the means and methods of its realization. Of course, chief among these means should stand our institutions of superior learning — our colleges and universities. The nation has a right to expect of and demand from these that the youth whom they undertake to train and develop shall be furnished at least with the elements of the political sciences with their literature and with the methods of a sound political logic. Many of them have long endeavored to accomplish something of this, with varying success, while some of them have recently put forth more than ordinary efforts to meet and fulfill in a higher degree this great public duty. In response to a most kindly and appreciative request from the editor of the “International,” we have undertaken to describe briefly the system of investigation and instruction in this sphere which New York’s oldest institution of learning — Columbia College — has established and is now essaying to perfect.

This system consists of four distinct and well-defined parts, viz.: The Undergraduate Department of History and Political Science, The School of Political Science, The Academy of the Political Sciences, and The Library of the Political Sciences.

 

I. The Undergraduate Department.

The key-note of our whole system is its historical groundwork and its historical method. It is in and through history that the State has taken its origin and passed through the different phases of its development down to its present form and relations. Therefore it is in and through a sound and comprehensive study of history alone that the foundations can be laid for a true and valuable public law and political science. Theory and speculation in politics must be regulated by historic fact — must be generalized most largely from historic fact; otherwise, they are always in danger of degenerating into the “will-o’-the-wisps” of individual fancy. We begin, therefore, with the study of history, and devote the two years assigned to the department in the undergraduate course to laying the historical groundwork. Here we employ the gymnastic method and seek the accomplishment of the gymnastic purpose, viz., the daily drill by recitation, question and answer from text-books of German, French and English history and of elementary political economy, with the purpose of fixing and classifying in the memory of the student the elements of political geography, the chronology and outward frame of historic events, the biographies of historic characters, and definitions of political and economic terms. The completion of the junior year in the undergraduate curriculum marks the close of gymnastic study and preparation. The senior year in all our colleges of the first rank has become a real university year, both in the character and method of the instruction there given and employed. We therefore draw the line in our system between the Gymnasium and the University at the termination of the junior year, making the senior year of the College in these studies to correspond with the first year in the School of Political Science, and admitting to this School as candidates for its degrees all persons who have completed successfully the work of the first three years in any collegiate institution of the first rank in the United States, or an equivalent course in any foreign college, lyceum or gymnasium, or who can pass successfully examination upon all the studies of the undergraduate curriculum of this institution to the end of the junior year.

 

II. The School of Political Science.

This is the collective name which we give to the graduate or university courses in history, philosophy, economy, public law, jurisprudence, diplomacy and sociology. The time prescribed for the accomplishment of the work here assigned is three years, and the courses are so distributed over this period as to occupy the first year with the history of the development of the political institutions of continental Europe, the special constitutional history of England and of the United States, the history of the philosophic theories of the State, and the history of economic systems and theories; the second with the comparative constitutional law of the principal States of Europe and the United States and of the Commonwealths of the United States, and with the Roman law and the comparative jurisprudence of the modern codes derived therefrom; and the third with the comparative administrative law of the principal States of Europe and the United States and of the Commonwealths of the United States, the history of diplomacy, public international law, private international law, and economic, statistical and social science.

It will thus be seen that we begin again with the historical groundwork in the School of Political Science; but this time it is the history of institutions, the origin and development of the State through its several phases of political organization down to the modern constitutional form; that we then advance through history to the existing actual and legal relations of the State, and that we seek finally through comprehensive comparison to generalize the ultimate principles of our political philosophy, aiming thus to escape the dangers of a barren empiricism on the one side, and of a baseless speculation on the other. With the change from the Gymnasium to the University, the method of instruction changes as well as the subjects. The text-book, with its assigned lessons and daily drill upon the same, is discarded, as both cramping to the student and narrowing to the professor. We must get here nearer to sources and original material. We must go back of the treatises to the earliest documents, and learn to form from these our opinions, and to make from these our own hand-books. The professor must no longer act merely the part of the drill-master upon a given text, but of the investigator gathering and classifying original evidence upon his subjects, and generalizing therefrom his view and system; and the student must no longer be the mere gymnast, carrying his library under his arm, but he must begin to learn and apply the processes of original study, and to compare authorities upon the points treated or suggested. In a word, the university professor must instruct for the most part by lecture, imparting the results of his own labor and experience, and developing his own view and system, and the university student must verify the statements and fill up the outline by constant and comprehensive reading in a great library which shall contain the principal sources of information upon all the subjects of the different courses of study to which his attention is directed. Individuality of view, independence of judgment, and comprehensive, all-sided knowledge are the ends here sought both for instructor and instructed. Lastly, the degree conferred upon the successful completion of the work assigned in this School is the university degree of Doctor of Philosophy. The examinations leading to the attainment of the same are two-fold. The first, at the close of the first year, does not differ in character from the usual college examination for the degree of Bachelor of Arts. If successfully passed, the candidate is made a Bachelor of Philosophy. The second, at the close of the third year, is, on the other hand, a matter of far more serious import. It consists of three parts: First, a direct oral examination of each candidate upon any or all the courses pursued in the presence of the entire Faculty and by each member of the same; second, two collateral examinations, one upon the Latin language and the other upon either the German or French languages, as the candidate may elect; and, third, the examination of an original dissertation prepared by the candidate upon a subject either assigned to him by the Faculty of the School or selected by himself under their approval at least six months before the date of the examination. The candidate must furnish each member of the Faculty with a copy of his dissertation at least one month before the date of the examination, and, at the time fixed, must appear before the assembled Faculty of the School and defend his facts, his reasoning and his conclusions against the criticisms of each member of the same. If he be fairly successful through all of these ordeals, the degree of Doctor of Philosophy will be conferred upon him. If he attain a high grade of excellence in all, the degree of Doctor of Philosophy cum laude, and, if the highest be reached, then the degree of Doctor of Philosophy magna cum laude, the highest university distinction, will be accorded him.

 

III. The Academy of the Political Sciences.

This is a voluntary association composed of the President of the University, the Faculties of Law and Political Science, graduates of the School of Political Science and graduates of the School of Law, who have taken at least two years of the instruction in the School of Political Science or an equivalent course in some foreign university. It recruits itself annually from these same sources. Its purpose is the cultivation and development, in finest and most minute detail, of the different branches and topics of the political sciences. This organization is the central point of our whole system. Upon it depends for the most part the perpetuation and increasing usefulness of our work. Not being a transient body of students, who reach only a certain given point before they vanish from our control, but a permanent body of continually growing scholars, this association forms the productive, ever-advancing element in our system. Whatever we may be able to add to the existing stock of political knowledge will proceed from it. Each of its members assumes the obligation to produce at least one original work each year, and read the same before the association at its regular meetings, which production then becomes the property of the Academy, and may be published by it for the benefit of the public, provided a majority of the members deem it worthy of the same. From its labors the Library of the Political Sciences will receive its scientific classification by subjects, a journal of political science will be edited, and, above all, it will be the source of a true educational service, from which the Faculty of the Historical and Political Sciences may be recruited, thus providing for the continuity of our work in an ever-increasing degree of excellence, enabling us to perpetuate our own methods and traditions, to expand without limit our courses, and to diversify indefinitely our instruction without endangering its organic unity — in a word, to found a School of Political Thought in the truest and highest sense. This is the significance of the Academy — this is its office in our system.

 

IV. The Library of the Political Sciences.

A great library, scientifically classified and adequately served, is an indispensable part of a university. As well expect the architect merely with rule and pencil to rear a great structure as to demand of the scholar the production of literary monuments without this magazine of material. Neither will a collection merely of hand-books, textbooks, treatises and current literature suffice. These are necessary, indeed, as demonstrating how and how far authors have worked up original matter into logical form; the collection which stops there, however, may be a popular library indeed, or even a college library, but it is no university library. The prime purpose of the university library is, on the other hand, the assemblage and classification of original material in all branches of knowledge — such, for instance, in the domain of the political sciences, as the texts of constitutions, the statute books and ordinances of governments, the debates of legislative assemblies, the decisions of judicial bodies upon questions of public law, the papers of diplomatic intercourse, the texts of treaties, the reports of governmental commissions, statistical bureaus, chambers of commerce, boards of industry and agriculture and of the public health, the journals of international congresses, political conventions and academies and associations of political science, contemporary chronicles of historic facts, files of official gazettes, leading newspapers and magazines, etc., etc. It was this consideration which moved the trustees of this institution some four years since to authorize a special effort and a special appropriation of funds for the advancement of our Library of the Political Sciences. By their authority and with their aid exhaustive lists of original material in all the different branches of the political sciences were gathered from the leading publicists of the United States, England, France, Germany, Austria and Italy. A large portion of these works have already been placed within our Library, and we are steadily adding to the collection. It is with this material that we teach our students in the School of Political Science to acquaint themselves, and it is upon this material that the members of the Academy expend their labors, reducing it to scientific order and classification, and making it the basis of original work in the production of papers, monographs and treatises.

This, then, is the system of study in the political sciences at Columbia College which six years of reflection and experience have thus far matured; and, in giving this brief sketch of its main features to publication, those who have been most nearly concerned in its conception and development gladly avail themselves of the opportunity to make their most grateful acknowledgment for the support which they have felt from the sympathy of a generous and appreciative public.

 

Source: The International Review, Vol. XII, April 1882, pp. 346-351

Image Source: From the Columbia University, Department of History webpage: A Short History of the Department of History.

 

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Economic History Economists

John Hicks Arguing for More Economic History Research, 1947

The Duke Economists’ Papers Project has a grab-bag of papers from the distinguished economic historian Earl J. Hamilton. A soul braver than myself might some day try to create order out of that chaos, but I was able to stumble upon the following early “remarks” by future Nobel-prize economist John R. Hicks, though lacking all context save the date. Perhaps a Hicks expert or an historian of economic history can identify where these remarks were given (or perhaps eventually published?). These remarks sound much like Schumpeter’s recipe for a good economist writ large to economic research. I can only say, “Hear, hear!”

________________________

RESEARCH IN ECONOMIC HISTORY

John R. Hicks
January 11, 1947

The following remarks about the desirability of encouraging research in economic history are written from the standpoint of the general economist, who is not primarily a historian. He is not interested in economic history as history, but he is interested in furthering the development of economic science in general. He is looking for the general principles governing economic behaviour, and his particular interest is the application of those principles to the modern world.

As compared with the situation in the natural sciences, the economist’s object of study is essentially a historical process, spread out in time. In practice his main preoccupation is with the advancing edge of that process (the present), and it is right and proper that this should be so, since the present is more likely than the past to have a bearing on the future, control over which is the ultimate practical object. But this preoccupation can easily go too far. The past, no less than the present, is part of the material available for study and out of which generalisations can be built up. Generalisations based upon the present alone, or the present and recent past alone, are necessarily insecure; no doubt all economic generalisations are insecure, but these are more insecure than they need be.

The relevance of economic history to economic science has greatly increased of late, in view of the recent tendencies to bring economic theory to earth and achieve a more effective marriage between theory and statistics. Econometric work based upon very short time series is statistically unsatisfactory, and cannot be used as a basis for prediction with any high degree or probability. There is thus a tendency on the part of economic statisticians to push further back into the past as a means of increasing the amount of analysable material. But such additional material cannot be securely used unless its reliability is evaluated by people who are accustomed to use historical evidence—collaboration between the trained statistician and the trained historian (a very awkward collaboration with our present academic background) is going to be urgently needed at the next stage of development of economics. Further, it is not only the material which needs checking—the use which is made of it needs checking too. As we push backwards into history, institutions change; the whole background, economic, semi-economic and non-economic, changes. One of the commonest sources of error in economic reasoning is a failure to recognise that an institutional change has made a profound difference to the working of some particular “mechanism” or standardised response pattern. We notice this most often in a failure to “keep up to date”—the “out of date” economist is he who has failed to realize that a change in institution had modified or even completely destroyed some of the reaction patterns which may have been valid enough when he was young. The opposite error has hitherto been of less importance, but there are indications that it is now becoming serious; although it will never have the practical importance of that just described, it may be a serious impediment to scientific progress. To read the events of the past against an institutional background which is not theirs, is just as wrong as to read the accounts of the present against a background which is not theirs. Unless the background is in good shape, historical statistical data cannot be used; they can only be misused.

The above is not only an argument, as might appear at first sight, for better training of economists and statisticians in economic history; it is also an argument for research in economic history. For the sorts of questions which economists and statisticians are beginning to ask of the historical material are different from the questions which the historians have been asking. The historical background which is needed is not there, to be had for the asking, in the textbooks—or the classics—of economic history; to a large extent, it is yet to be discovered by new work.

I have here one example mainly in mind, though I am sure it is not the only example—not by a long way. The “Keynesian revolution” has thrown a powerful new light on contemporary economics; just how far the light extends is an arguable matter, but that it extends some distance can hardly be questioned. Now it would be of great help in our evaluation of the current uses of the Keynesian hypotheses if we could tell how far back in history they go on being useful. If it can be shown that they are useful in the interpretation of the economic history of the nineteenth or even eighteenth centuries, it would strengthen their position as a “General Theory”; if on the other hand, it becomes apparent that we have to force the historical material to get it into a Keynesian mould, we should get an indication of the dependence of the theory on a particular institutional (and perhaps psychological) set-up, and this would hardly fail to affect our attitude towards the theory and even our use of it vis a vis the problems of to-day.

I pass on to a much wider consideration. The ascertainment of economic principles or generalisations is only a step towards the understanding of events; one may say that the object of all economic inquiry—the penultimate object, perhaps, short of the ultimate object of increasing our control over the future—is to give an intelligible and analytical account of economic and economico-social processes, both the completed processes of the past and the uncompleted processes of the present. Now in some important ways the processes of the present are more difficult to study; they are more difficult because the sheer mass of material drives us to excessive specialisation, and also because their lack of completion deprives us in another way of the advantage of seeing the processes as a whole. In historical work it is at least in principle easier to take a synoptic view; and one cannot help feeling that if a rather larger proportion of economic research was devoted to historical problems it would help to maintain better standards of “all-roundness” in the sector—undoubtedly the more important sector from a practical point of view—which is concerned with the problems of the contemporary world.

This, in my view, is the case for encouraging research in economic history But I am well aware of the main difficulty which stands in the way of such research, if it is to be the kind of research which really meets the ends which I have set down. The number of people who have the equipment. to do the work—equipment in history and economics and probably statistics as well—is at present extremely limited. Work of this sort needs a bigger equipment than more specialised work, and therefore involves a longer preparation. At present there is little incentive to undergo this long preparation, and even for those people who have strong personal inclinations for it, there are strong incentives to turn aside on the way. In all the universities of the British Isles (I speak of what I know) there are at present only five chairs of economic history—two in London, one each at Oxford, Cambridge and Manchester. Apart from these, the subject offers very few openings indeed. Thus if greater encouragement were offered, one could not expect that supply would adjust itself to demand at once; it would take time before the number of suitable people could be much increased. If however one looks round at the people who have been diverted into teaching or research in “straight” economics or “straight” history, one can not doubt that the potential supply of first-rate economic historians is quite considerable; it would take time to show itself, but it would show itself in time.

 

Source: Duke University. Rubenstein Library. Earl J. Hamilton papers. Box 2, Folder “Correspondence—Misc. 1930’s-1950’s and n.d.”

Categories
Chicago Computing Economists Salaries

Chicago. Purchasing order for a calculator for Henry Schultz. 1928.

Here is an item to file away under the cost of computing. Henry Schultz, the young hot-shot professor for mathematical economics and statistics wanted a fully-automatic Monroe calculator with an electric motor drive (pictured above). With discounts, the calculator and stand cost $631.  To get a relative price (in a hurry), I note that the nine month salary for Henry C. Simons at the rank of Lecturer was $2790, i.e. $310 per month. Thus figure that calculator-with-stand ran roughly two months of (approximately) instructor rank pay today.

Recommendation to appoint Henry C. Simons May 20, 1927: University of Chicago Archives. Office of the President, Mason Administration. Box 24, Folder 2.

Cf. a request to purchase two calculators for the use of the Columbia University economics faculty in 1948.

_______________________

[carbon copy]

January 8, 1928

 

Mr. J. C. Dinsmore [Purchasing Agent]
Faculty Exchange

My dear Mr. Dinsmore:

I am enclosing a requisition against the instruction fund of the Department of Economics for $652.13 [sic] which is to cover the purchase of the following material:

1 Monroe Machine – KAA 203…$825.00

less 15% and 10%…….$631.13

1 Fowler Manson Sherman Stand (low)… 21.00

Total                                       $651.13

 

Professor Henry Schultz is anxious to have these articles delivered as promptly as possible. Will you please telephone me when they arrive so that I can tell you to what room they should be delivered.

So that there will be no delay in the attached requisition being approved promptly, I quote a paragraph taken from a letter of September 24 from Mr. Woodward to me:

“I have arranged with Mr. Plimpton for you to draw on the instruction budget of the Department of Economics for the sum of $2600 in order to provide Mr. Schultz with equipment, supplies, and clerical assistance. It should be clearly understood that this arrangement is for the present year only.”

Yours very sincerely,

L. C. Marshall [chairman of the department]

LCM: GS

Source: University of Chicago Archives. Economics Department. Records & Addenda. Box 6, Folder 2.

_______________________

About the KAA model:

“Model KA from 1922 was the first Monroe calculator with an electric motor drive. The machine has an AC induction motor of about 5″ diameter mounted externally on a cast-iron bracket at the left-hand rear. The motor occupies the dead area under the extended carriage, and so requires no additional desk space. The motor rotates in one direction only at 1500RPM. The mechanism is driven through a planetary gearset, with two dog clutches operated by the Add and Subtract bars to select forward or reverse rotation. The case has been widened by an inch and a half to accommodate the control mechanisms on the left-hand side. The winding handle has been replaced with a knurled brass knob, but the crank can easily be re-fitted to operate the machine by hand.

The carriage has glass windows above the numerals, but carriage shift and register clearing are still manual. The item count knob is at the lower left of the keyboard, with an additional control lever at the upper left to silence the overflow bell.

…[The] Monroe’s head office, which was in New York City until the mid-1920s.

A fully-automatic variant (the Model KAA) was built during the mid to late 1920s. The KAA is wider again than the KA, and has a single column of “on-the-fly” multiplier keys to the left of the main keyboard.”

Source:  John Wolff’s Web Museum. The Monroe Calculating Machine Company

Image Source: KAA-203 photo attributed to contribution by Helmut Siebel. See the link above.

_______________________

For a history of the company.

_______________________

An image of a representative typewriter stand made by a Chicago company (note: a bicycle manufacturer) from the antique dealer Urban Remains of Chicago.

FowlerMansonShermanTubularStand

Categories
Chicago Courses

Chicago. Price Theory. Econ 300 A&B. Friedman Readings ca 1947

 

 

When compared to the list of Milton Friedman’s reading assignments for Economics 300 A&B for 1948, we note that the following handwritten list of readings taken from the student notes of Norman M. Kaplan who attended both 300A and 300B during the Winter Quarter 1947 do not include the 1947 items found in the 1948 list:

Pigou, A. C., “Economic Progress in a Stable Environment,” Economica, 1947, pp. 180-90.

*Dennison, S. R., “The Problem of Bigness,” Cambridge Journal, Nov. 1947.

This leads me to conclude that we indeed have the assigned Winter Quarter readings for Friedman’s second iteration of Economics 300A and his first iteration of Economics 300B. There is much more in Kaplan’s student notes, but this is enough for one posting.

______________________________

[undated, handwritten copy by Norman M. Kaplan]

Friedman’s readings 300 A&B

 

F. H. Knight, “Social Econ. Organization”; “The Price System & the Econ. Process” (in The Economic Organization, pp. 1-37)

 

Marshall

Bk III, ch. 2, 3, 4,5
Bk V, ch. 1,2,3,4,5,12, Appendix H
Bk IV, ch. 1, 2, 3
Bk V, ch 6
Bk VI, ch. 1-5           (ch. 1,2 done)

 

H. Schultz, Meaning of Statistical Demand Curves, pp. 1-10
E.J. Working, “What do Statistical ‘Demand Curves’ Show?

 

Knight, Risk, Uncertainty, and Profit, ch 3
Hicks, J. R., Value and Capital, Part I (pp 11-37)
W. A. Wallis & M. Friedman, “Empirical Derivation of Indifference Functions” (in Lange, Studies in Math. Econ. & Econometrics, U of C Press)

 

A. L. Myers, Elements of Modern Economics, ch 5, 7, 8, 9
J. Robinson, Econ. of Imperfect Competition, ch 2 (in 209 notes)
J. M. Clark, Econ. of Overhead Costs, ch 9
J. Viner, “Cost Curves and Supply Curves
E. Chamberlin, Theory of Monopolistic Competition, ch 3, secs. 1, 4, 5, 6; ch 5
R. F. Harrod, “Doctrines of Imperfect Competition”, QJE, May 1934, esp. sec. 1, pp. 442-61

 

J. B. Clark, Distr. of Wealth, Preface, ch 1, 7, 8, 11, 12 (in 209 notes), 13, 23

 

J. S. Mill, Prin of Pol Econ, Book II, ch 14
Hicks, Theory of Wages, ch 1-6 (in 209 notes)
Smith, Wealth of Nations, Bk I, ch 10

 

Friedman and Kuznets, Income from Independent Professional Practice,

Preface, pp. v to x,
ch 3, sec 3, pp. 81-95,
ch 4, sect 2, pp. 118-137,
app to ch. 4, sec 1 & 3, pp 142-151, 155-61

 

F.H. Knight, “Interest” in Ethics of Competition
Keynes, GT [General Theory], ch 11-14

 

Cassell, Fundamental Thoughts in Econ, ch. 1, 2,3
[____], The Theory of Social Economy, ch 4

 

Hicks, “Keynes & the Classics”, Econometrica, Apr 1937, pp. 147-159
Modigliani, “Liquidity Preference & the Theory of Interest & Money,” Econometrica, Jan 1944, esp. Part I, sec. 1 through 9, sec 11 through 17, part II, sec 21
Pigou, “Classical Stationary State,” Econ Journal, Dec 1943, pp. 343-51

 

Source: Kaplan, Norman Maurice. Papers, Box 1, Folder 8, Special Collections Research Center, University of Chicago Library

Image Source: The Mont Pelerin Society webpage “About MPS”.

 

Categories
Chicago Courses Syllabus

Chicago. Price Theory. Economics 300 A&B. Metzler. 1948-49

Milton Friedman wasn’t the only person teaching graduate price theory at the University of Chicago in the postwar years. During the academic year 1948-49 both the Harvard-trained Lloyd A. Metzler and Milton Friedman offered parallel sessions of Economics 300 A&B during the same quarters. Both taught the course going into the early 1950s. While the overlap is significant to be sure, the differences of the two approaches, Chicago vs. Harvard, are fairly clear. 

One of the advantages of consulting multiple archives is that I was able to find this Autumn 1948 reading list for Economics 300A, not in Lloyd A. Metzler’s papers at Duke but in Milton Friedman’s papers at Hoover. This list of readings does not square with Friedman’s course organization but also has no name and the course catalogue for 1948-49 does not identify Metzler. Since it matches the later years’ reading lists found in the Metzler papers, we know the nameless Economics 300A for the Autumn Quarter at the University of Chicago was taught by Metzler too.

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Economics 300A
Autumn 1948

I. The Theory of Consumer’s Choice

A. Marshall, Principles of Economics, Book III.

J. R. Hicks, Value and Capital, Chapters I – V, and appendices to these chapters.

W. S. Jevons, Theory of Political Economy, Chapters I – IV.

P. A. Samuelson, Foundations of Economic Analysis, Chapters III, V, VII.

M. Friedman [& L. J. Savage], “The Utility Analysis of Choices Involving Risk,” Journal of Political Economy, LVI (August, 1948) 279-304.

I. Fisher, “Measuring Marginal Utility,” in Economic Essays in Honor of John B. Clark (1927).

II. Production Functions and Cost Schedules

J. M. Cassels, “On the Law of Variable Proportions,” in Explorations in Economics (1936).

J. R. Hicks, Value and Capital, Chapter VI, VII, VIII, and appendices to those chapters.

J. Robinson, The Economics of Imperfect Competition, Chapter II.

P. A. Samuelson, Foundations, Chapter IV.

G. J. Stigler, The Theory of Price, Chapters VII, VIII.

III. Market Price under Perfect Competition.

J. Robinson, Economics of Imperfect Competition, Book III.

A. Marshall, Principles, Book V.

G. J. Stigler, The Theory of Price, Chapters IX, X.

IV. Monopoly and Monopolistic Competition.

J. Robinson, Economics of Imperfect Competition, Books II, IV, V, and X.

E. Chamberlin, Theory of Monopolistic Competition, IV, V, VI, VII.

V. Duopoly, Oligopoly, Bilateral Monopoly.

J. Marschak, “Neumann’s and Morgenstern’s New Approach to Static Economics,” Journal of Political Economy, LIV, (April 1946).

E. Chamberlin, Theory of Monopolistic Competition, Chapter III.

H. G. Lewis, “Some Observations on Duopoly Theory.” American Economic Review, XXXVIII (May 1948, supplement) 1-9.

O. Morgenstern, “Oligopoly, Monopolistic Competition, and the Theory of Games,” American Economic Review, XXXVIII (May 1948, supplement) 10-18.

VI. Modern Price Theory and Welfare Economics.

A. Burk (Bergson), “A Reformulation of Certain Aspects of Welfare Economics,” Quarterly Journal of Economics (1937-38).

A. C. Pigou, The Economics of Welfare (4th Edition), Part II, Chapters I – XI.

A. P. Lerner, The Economics of Control, Chapters I – XIX.

P. A. Samuelson, Foundations, Chapter VIII.

J. R. Hicks, “The Foundations of Welfare Economics,” Economic Journal XLIX (1939).

G. J. Stigler, “The New Welfare Economics,” American Economic Review, XXXIII (1943), 355-359.

Source: Hoover Institution, Milton Friedman Papers. Box 76, Folder 9 “University of Chicago Econ. 300 A”.

____________________________

Economics 300B
Major Topics and Selected Readings
Winter, 1949
Lloyd A. Metzler

The principal books to be used are as follows:

A. Marshall, Principles of Economics, eighth edition, reprinted 1947.

J. R. Hicks, Value and Capital, second edition, 1946.

B. Haley and W. Fellner, editors, Readings in the Theory of Income Distribution, reprinted 1947.

G. J. Stigler, Production and Distribution Theories, 1941.

I. Production Functions and the Doctrine of Marginal Productivity

B. Haley and W. Fellner, Readings, Chapters 5, 6, 7, 11.

Stigler, Production and Distribution Theories.

P. H. Douglas, “Are There Laws of Production?”, American Economic Review, XXXVIII (1948) 1-41.

II. The Theory of Wages

B. Haley and W. Fellner, Readings, Chapters 13, 14, 16, 17, 19.

J. R. Hicks, The Theory of Wages, 1932.

R. A. Lester, “Shortcomings of Marginal Analysis for Wage-Employment Problems”, American Economic Review, 1946.

F. Machlup, “Marginal Analysis and Empirical Research”, American Economic Review, 1946.

G. J. Stigler, “The Economics of Minimum Wage Legislation,” American Economic Review, 1946.

III. Capital and Interest

E. Böhm-Bawerk, The Positive Theory of Capital, 1891.

I. Fisher, The Theory of Interest, 1930.

W. Fellner and B. Haley, Readings, Chapters 20, 21, 22, 23,24, 26.

J. M. Keynes, General Theory of Employment, Interest and Money, Book IV.

A. Marshall, Principles, the relevant chapters in Books IV and VI.

J. R. Hicks, Value and Capital, Parts III and IV.

IV. Inter-relations of Wages, Interest, and Profits.

F. H. Knight, Risk, Uncertainty and Profits.

J. A. Schumpeter, The Theory of Economic Development.

O. Lange, Price Flexibility and Employment.

K. Wicksell, Interest and Prices.

K. Wicksell, Lectures on Political Economy, Vol. I, Part 2.

Source: Duke University David M. Rubenstein Rare Book & Manuscript Library. Lloyd Appleton Metzler Papers, Box 9, Folder: “Reading Lists 300 A & B — 302”.

Source Image: “From family album, taken while Lloyd Metzler was a student at Harvard.”
“Lloyd A. Metzler” by Margiemetz – Own work. Licensed under CC BY-SA 3.0 via Commons.