Judging from the final examination questions, it would appear that this “the economics of transportation” was dedicated to “railway economics”. But what’s in a name?
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Earlier exams etc. for Economics 5
1900-01 (Hugo Richard Meyer alone) 1901-02 (Ripley with Hugo Richard Meyer) 1903-04 (Ripley alone) 1904-05 (Ripley with Stuart Daggett) 1905-06 (Ripley with Stuart Daggett) 1906-07 (Ripley with Stuart Daggett and Walter Wallace McLaren)
On two roads, the figures for certain operating statistics were:
3,855,000 ton miles per mile, and 428,000 ton miles per mile respectively. What is this called? What is its full financial significance?
In comparing the operating results of two roads, in what way, if any, may the balance sheets be used? How did you analyze them in your report?
What has been the course of developments concerning the attitude of the United States Supreme Court toward the legislative branches of the government in respect of rate regulation?
What states have attempted specific valuations of railway property: and what has been the leading motive in each case?
Name three peculiar features of German States railway practice, as contrasted with American conditions.
How far has actual railroad consolidation progressed in the Southern States, and why?
Discuss the proposition that railroad capitalization and the rates for service charged are entirely independent of one another.
M.I.T., home of the heretic Paul Samuelson, proved to be ground zero of this anti-Keynes reaction. This story is well-known now thanks to Yann Girard. The artifact transcribed for this post is a short essay published by Ralph Freeman who was head of the M.I.T. economics department from 1933 to 1958. In it Freeman defended the honor of his department much as Lloyd Reynolds’ essay did for Yale economics.
Thank you for the Atlantic Monthly with McGeorge Bundy’s article which I have. I wish that his defense could have a wider circulation than it received in the Atlantic.
The Buckley book concerns me mainly because of its attack on Samuelson’s text and because of the wide distribution the Buckley book is receiving it is going to stir up a lot more people.
I venture to send you some of the things that come to my desk simply by way of keeping, you informed of the steady bombardment on Paul Samuelson’s text. This bombardment has been increasing in intensity. Yesterday a member of the Corporation came to see me about it. He had not previously had contact with the book, but he had been approached by various business people who were bitterly critical of the book and who brought to him a publication issued down south which raked over the old Namm comments [Benjamin Namm, “Would You Enter a Door Marked ‘Socialism’?” in Collier’s Weekly (April 29, 1950), pp. 34-49] upon the book.
I have just received a copy of the Brooking Institution study, “A Survey of Economic Education” by McKee and Moulton. I am afraid that the comments made in this study on page 17 in regard to economics textbooks will still further stir people up despite the qualifications which the authors carefully include in their statement.
I hasten to reassure you that despite the mounting criticism I stand no less steadfastly behind Samuelson’s right to take the point of view that seems right and proper to him. I think our best defense against criticism is the one that I repeatedly make, and which I assume to be wholly true, and that is that in our own teaching of economics at the Institute we do not follow any line, that we seek to present a balanced point of view and to give the student the tools so that he can reach his own conclusions. I was interested in Bundy’s statement in his Atlantic article that in attacking Mr. Buckley’s book, he did not wish to maintain that Yale was perfect and that “it is possible that Yale…..would benefit from the appointment of a strongly right-wing economist.
I am sure that so long as we can show that our own teaching of economics is not distorted in any direction and that we are not subtly indoctrinating students with any biased point of view, that we have an unimpregnable and sound position.
Yours cordially,
J. R. Killian, Jr.
JRK: mh
* * * * * * * * * *
Department Chair to President “We’re cool kids, really”
Massachusetts Institute of Technology Department of Economics and Social Sciences
Cambridge, Mass.
November 19, 1951
President James R. Killian
Room 3-208
Dear Jim:
As I indicated to you in a recent conversation, a group of the Department staff is preparing a new book of readings to supplement the textbook which we use in Economic Principles (14.01 and 14.02). I have been delaying writing you about this until final decision has been made as to the contents of this new book. However, a tentative table of contents is now available and I enclose it herewith.
As you will observe, the projected book of readings aims to present a variety of points of view ranging from radical to conservative, from Marx and Engels to Pope Leo XIII. There are also readings from classical economists such as Adam Smith, Ricardo and Bastiat. Articles criticizing recent government policies are included as well as various opinions on the economics of the defense program. The use of this book will enable us to do on a large scale what we are already doing with a limited number of collateral readings.
I should like to emphasize once more that the members of the Department as a group range around the center in their economic thinking. There are no extreme radicals or extreme conservatives among us. We try to take a view toward economic problems which is balanced and objective, and in class we try to present both sides of the controversial problems that come up for discussion.
From some of the attacks aimed at Samuelson’s book, I get the impression that economists are to be condemned if they do not unequivocally approve of everything now being done in the name of private enterprise. This attitude, of course, is absurd. If the economic system is to be kept in working order it must be subjected to a critical analysis. In fact it is the job of the economist to do just this.
Some of the more extreme conservatives who are today attacking the teaching of economics are inclined to adopt an ostrich-like attitude. After all we do live in a mixed economy — one that is partly private enterprise and partly government control. This is a fact. Should this fact be hidden from students? The answer is clear. But some of our critics talk as though any discussion of what they regard as undesirable trends should be eliminated or reduced to a minimum.
I can assure you that no member of this Department is trying to undermine the system of freedom. In fact, it is quite the reverse. We are all trying to understand it with a view to making it work better and last longer. Though there is disagreement amongst us on particular issues, we are in agreement on that basic issue.
I am not sure there is much more that I can say. We would be glad to meet any of our critics face to face in a friendly discussion of any points on which they think we are in error. We do not claim to have all the answers. Our analysis might well be improved as the result of more exchange of ideas with intelligent business men.
Yours sincerely,
[signed] Ralph
Ralph E. Freeman
REF:rw
[in pencil]
Copies of this letter sent to:
Mr Gray [Daniel M. Gray?] of Stoner Mudge [Stoner-Mudge Co., Inc. of Pittsburgh]
Bradley Dewey [Life Member of MIT Corporation, 1932-74]
Dr. Warner, Pres. Carnegie Tech [John Christian Warner (1897-1989), President 1950-65]
Donald Carpenter [Life Member of MIT Corporation, 1943-95]
John Hancock [Member of MIT Corporation, 1949-55]
Walter Beadle [Life Member of MIT Corporation, 1943-88]
* * * * * * * * * *
President to Department Chair
“Be like Yale.”
November 28, 1951
Professor Ralph E. Freeman
Economics Department
Dear Ralph:
Professor Shultz sent me a copy of an article by Lloyd G. Reynolds entitled “The State of Economics at Yale.” This article seemed to me to be a first-rate exposition of the philosophy and methods of the department at Yale. The material is set forth not in a defensive manner at all, and to me was fairly convincing.
This is the kind of statement that I have been hoping that someone might prepare on our own department program here. I think it would be of great help to the Visiting Committee and to the department and the administration in supporting the interests of the department.
I have returned the Reynolds article to Professor Shultz. If you haven’t seen it, you may be interested in borrowing it from him.
Yours cordially,
J. R. Killian, Jr.
JRK: mh
* * * * * * * * * *
Department Chairman to President “You asked for it.”
Massachusetts Institute of Technology Department of Economics and Social Sciences
January 17, 1952
Dr. James R. Killian
Room 3-208
M.I.T.
Dear Jim:
I have had sent to you a little article entitled
“Economies at M.I.T.” You may recall that you suggested I try my hand at an article of this sort.
I hope it will be of some help in dealing with correspondence regarding the operations of the Department. Several others of the staff have read and expressed general approval of the contents. It has been suggested that it might be submitted to The Technology Review which might be willing to supply us with some reprints.
I welcome any criticisms or suggestions for additions or omissions.
Yours sincerely,
[signed:] Ralph
Ralph E. Freeman
REF: TW
cc: Dean Burchard
Source: Massachusetts Institute of Technology. Office of the President, Records, 1930-1959, Box 93, Folder “8. Freeman, R.E., 1945-54”
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Note: the following is a transcription of the printed article found in the archive with Freeman’s letter. The typed draft sent to M.I.T. President Killian is identical, only minor editorial changes were made for publication.
Economics at M.I.T.
[1952]
The Economics Staff, with Diverse Backgrounds and Views, Aims to Impart a Technique of Logic for Solving Economic Problems in a Complex Society
By Ralph E. Freeman
One of the most difficult problems confronting the professional teacher of economics is the competition he meets from other and more effective teaching agencies. The writer refers to the educational impact of the home, the press, and the radio, as well as the propaganda coming from special-interest groups of one kind or another. These agencies have a competitive advantage. The teacher may be in contact with his class for only two or three hours a week for a part of a year, while his nonacademic competitors have been working on these students since their early childhood.
This disadvantage may seem to raise the question as to whether the economist can really teach the subject at all. Doubts on this score are further increased by the unsettled condition of the world during the last decade — a state of affairs that has created many uncertainties for the individual. A student worried about his future can hardly be blamed for indifference toward a subject which often seems dull and remote from his immediate interests. Another disadvantage is the youth and inexperience of the average college student. Favorable experience with the veterans who came to the Institute after World War II indicates that maturity is a great advantage in the study of economics. All these difficulties in the way of the teacher tend to make him humble when appraising the impression he leaves on the minds of the younger generation.
These obstacles, however, are also a challenge to the economist to improve his teaching techniques. The Economics staff at the Institute has been continually experimenting with new materials and methods and, though it is not fully satisfied with the results, progress has been achieved. We have tried to keep up with the increasing mass of quantitative data becoming available and to keep abreast of improvements in analytical techniques and of shifts in emphasis resulting from changing economic conditions.
An interesting example of such a shift is to be found in the treatment of unemployment and price levels. Prior to the 1930’s, these problems were of secondary interest to most economists. A great deal of what they wrote and taught was based on the assumption of full employment and relatively stable prices. The attention of economists was directed mainly to the way in which productive agencies were allocated among various industries and enterprises. The leading problem was to discover that distribution of human and material resources which would best promote the material well being of the people.
In recent years the economist’s inquiry has focused on economic fluctuations. Unemployment of resources has thus become a major problem for investigation along with a study of changes in the level of prices. Because ups and downs in employment and periods of inflation and deflation are associated with changes in income available to purchase goods and services, the spotlight has been turned on income analysis. The study of national income has been stimulated by the publication of improved statistics emanating chiefly from the Federal Government and by the development of new and better techniques of analysis.
These statements are not meant to imply that the traditional subjects have been abandoned. The economist is still trying to explain what the economic system is and how it operates. He is still concerned with the role of prices and profits in organizing economic activity and with the functions of money and markets in assigning labor and capital to their more productive uses. What has happened is a reorientation of these traditional inquiries around the problems of income, employment, and price levels. This new approach seems to have brought the study of economics nearer to the daily lives of people and closer to the problems with which businessmen are most vitally concerned.
The fact that the beginner in economics is normally young and inexperienced makes it necessary for the teacher to spend a good deal of time describing the facts of economic life. National income, for example, only becomes meaningful as it is broken down into components and expressed in quantitative terms. It is usually desirable, therefore, to start with a discussion of the income of individuals, corporations, and governments. How is the total income of the nation divided among families and groups? How are corporations organized? How do they compute their earnings? What is the role of government and what changes are taking place in the relation of the government to the individual and to business? These are among the questions with which the student of economics is confronted in the early stages of his study. In addition, in most of the subjects offered, time is devoted to describing various institutions such as banks, labor unions, and farmers’ organizations which help determine the nature and direction of economic activity.
The main objective of economic education, however, is not to fill the minds of students with facts and statistics, but to impart to them a technique of thinking by means of which they can analyze and solve economic problems for themselves. General principles must be developed that are applicable to a broad range of situations. Among these principles are those that can be applied in understanding changes in the price of goods, changes in wages, interest, and profits, in the general price level and in the national income.
The economist is concerned, for example, not so much with what the price of wheat is or has been, as he is with the forces that interact to determine the price of wheat or any other commodity. Though he may study past changes in national income, he is primarily interested in the reason why the national income shifts from one level to another. In other words, he tries to develop an integrated theoretical framework which can be used in the analysis of economic problems.
At M.I.T., the economist is regarded as a teacher, not a preacher. His function is not to radiate his own political views nor to propagandize for his own particular social philosophy. His job is to encourage students to form their own opinions. He is not too concerned with what these opinions are. His main job is to ensure that the opinions, whatever they may be, are reached through a logical process of thought, rather than as a result of prejudice or hearsay.
The Economics staff of about 30 full-time members has been recruited with this objective in view. When a new man is taken on, we ask two main questions. Is he equipped by training, experience, and intelligence to carry on creative, scholarly work in his chosen field? Is his personality such as to hold out the promise that he will be a competent teacher and a congenial and co-operative colleague? As the result of this method of selection, the group we now have includes no freaks or extremists. Though there is a broad diversity of view on many of the controversial issues of our times, all of the members of the Department share a desire to preserve and improve the free institutions of America. These men rank high in the profession and compare very favorably with economists in other leading institutions.
Some people may find it hard to accept the idea that divergence of opinion should be regarded as a healthy condition. Why, it may be asked, should I tolerate a colleague who disagrees with me on government controls, the merits of labor unions, taxation, monetary policy and other questions? My answer would be that differences of opinion give rise to a lively interchange of ideas which is an important element in the educational process. Progress in economics, or in any other scientific discipline, would be stifled if an effort were made to enforce conformance to a single pattern of thought.
No matter how firmly we may believe that a given policy is the correct one, there is always a good chance that the man with a different opinion may have something meritorious to propose on his side. A story is told of Al [Alfred E.] Smith who was traveling in upper New York State with two companions, a Protestant and a Catholic. It was early on a bitterly cold Sunday morning when the two Catholics arose to attend mass. Looking at the Protestant sleeping peacefully in his warm bed, Al Smith said to his friend: “Wouldn’t it be awful if he were right and we were wrong!”
The chance that the other fellow may be right, or partly right, makes it inadvisable to strive for unanimity of thought and opinion. Tolerance of diversity is necessary for the preservation of the spirit of free inquiry which is the breath of life of an institution devoted to education and research. Such tolerance is one of the main features distinguishing a democratic from a totalitarian society.
As indicated above, this concept is applied in the Institute’s educational practices. In all courses, whether they are offered to undergraduates or graduates, the Department of Economics and Social Science tries to present contrasting views and opinions. In the beginning course in Economic Principles, which has been required of all students at the Institute, this procedure is subjected to severe time limitation. But even here this practice is followed. For several years we have been using supplementary readings presenting divers points of view and a new collection of such readings to accompany the textbook has just been prepared — a compilation that includes extracts from economic writings of all sorts, ranging from Karl Marx to the National Association of Manufacturers.
Besides this course in Economic Principles, there are many others, both on the undergraduate and the graduate level. These include several in the fields of labor relations, statistics, finance, theory, and international economics. There are courses in business cycles, technological innovation, and in the economics of particular industries. The Department also offers courses in psychology and international relations. As the name implies, the Department of Economics and Social Science is one that covers a wide field. It is a part of the School of Humanities and Social Studies and has close ties with the activities of historians and others who come under the same administrative direction. The bringing together of a number of different social studies exerts a broadening influence on both staff and students. It tends to make us look at human beings as members of an ever-changing, complex society subject to many influences in addition to those of an economic nature.
Virtually every student at the Institute takes economics at some point in his program. In addition to those subjects included in the Humanities Program, designed for the Institute as a whole, other subjects are tailored to fit the needs of professional courses such as those offered by the Department of Business and Engineering Administration. The Department also offers a four-year curriculum for undergraduates — Course XIV — leading to a bachelor’s degree in Economics and Engineering. Through emphasis on relationships among engineering, economics, and human relations problems, this Course aims to provide students with an understanding of both technical and non-technical aspects of our industrial society.
There is also a graduate division. There are about 50 students in this group, most of whom are candidates for the Ph.D. degree. Many of these men have come to M.I.T. from liberal arts colleges. They go into government, business, labor unions, and teaching as professional economists.
Because the training of the professional economist, normally requiring about seven years, is spent mainly in the classroom and the library, his knowledge of actual business practices is more limited than if he were actively employed in industry. This limitation of experience is a handicap of which the men on the Department’s staff are acutely conscious. We do not have as much direct contact, as might be desired, with what goes on in the factories, banks, railroads, public utilities, and other business enterprises whose activities we study.
Efforts are being made to bridge the gap between economic theory and business practice. Graduate students are encouraged to find summer employment in industry. Some of the staff members have had temporary jobs in business or government. Others have had an opportunity to get into close touch with industry through research projects. In recent years they have undertaken investigations in textiles, shoes, coal, housing, electronics equipment, and a variety of other industries. Several of our instructors act as consultants to business firms and have had ample opportunity to rub shoulders with businessmen and get a better idea of their operations and problems.
The Department also brings in businessmen to meet with classes and join in round-table discussions. The system of Visiting Committees is also helpful in getting the staff into touch with leaders in industry, finance, and the professions. But more of these contacts are needed. If we are to keep our feet on the ground, we must have the counsel and criticism of men of practical affairs.
The development of the new School of Industrial Management should be of material assistance in strengthening our contacts with leaders in the business world. Though the Department of Economics and Social Science will not be administratively a part of this School, it will be housed in the same building and will co-operate in carrying out its educational and research program. E. P. Brooks, ’17, Dean of the School, who is now in charge, is consulting with business leaders and hopes to enlist their aid not only in planning the project but also in executing the plans. The Department of Economics and Social Science should benefit, at least indirectly, from these extensive outside relationships.
We are grateful to the Alumni and other friends of the Institute who have taken an interest in our work. The Department is indebted to the companies which have supported our Industrial Relations Section, and have helped finance graduate fellowships and research activities; it hopes for a continuation of this interest and support. Such support will be needed if the Department is to maintain its position and to improve and expand its operations.
The number of students being graduated from Course XIV is now relatively small. and the demand for their services is high; but in the future we hope to increase the enrollment, and employment conditions are not likely to continue as favorable as they are today. This Course is new and therefore not yet widely known. Because it combines basic education in engineering and science, as well as in economics, and other social studies, its graduates have a broad background that should make them useful in a wide variety of jobs.
This spring the Department of Economics and Social Science expects to move into the recently acquired Sloan Building along with the School of Industrial Management. Readers of this article are invited to come and visit us in our new quarters. We will show you our Industrial Relations Library and our Psychological Laboratory. We will tell you about the Scanlon Plan that is making a valuable contribution to the betterment of employer-employee relations. We will describe research projects under way and point with pride to a growing list of publications by members of the Department. We would like to discuss with you the plans we have for future development in psychology and political science. The reader may be interested in meeting some of the staff or in talking to groups of students and if he can bear it, we will also tell him about some of our trials and tribulations. And perhaps he may have something on his mind he would like to tell us. If so, we will gladly listen. Our new address will be 50 Memorial Drive.
Image Source: This portrait of Ralph Freeman can be found in the 1950 yearbook. The copy used here comes from the MIT Museum website where it no date has been provided. Colorized by Economics in the Rear-view Mirror.
The chairman of Yale’s economics department in 1951, Lloyd G. Reynolds, found his department in the crosshairs of alumni enraged by the charge of collectivist indoctrination leveled by young William F. Buckley, Jr. (Yale ’1950) in his book that was a call-to-action for religious and individualist alumni of Yale to voice their opposition to the influence of atheism and collectivism on campus. Paul Samuelson’s textbook Economics was offered as Exhibit No. 1 of the collectivist rot found in the Yale economics department. Buckley’s bottom-line was explicit though not specific.
Image Source: PBS, American Masters. S38 EP3: The incomparable Mr. Buckley.
“I shall not say, then, what specific professors should be discharged, but I will say some ought to be discharged. I shall not indicate what I consider to be the dividing line that separates the collectivist from the individualist, but I will say that such a dividing line ought, thoughtfully and flexibly, to be drawn. I will not suggest the manner in which the alumni ought to be consulted and polled on this issue, but I will say that they ought to be, and soon, and that the whole structure of Yale’s relationship to her alumni, as has been previously indicated, ought to be reexamined.
Far wiser and more experienced men can train their minds to such problems. I should be satisfied if they feel impelled to do so, and I should be confident that the job would be well done.”
And so, in the interest of damage control, Reynolds found himself out on the stump speaking to alumni and other potential donors. This post gives us Reynold’s response to youthful calumny from the future darling of the extreme conservative fringe in the U.S.
Lloyd G. Reynolds, a scholar who shaped the fields of labor and economic development and transformed Yale’s Department of Economics, died April 9 at his home in Washington, D.C., after a series of strokes.
He was 94 years old.
Born and raised on a frontier settlement in the Canadian province of Alberta, Reynolds earned a B.A. at the University of Alberta, an M.A. at McGill University and a Ph.D. at Harvard University. He held an instructorship at the latter institution before becoming a professor at Johns Hopkins University.
During World War II, as federal spending increased at a furious pace, Reynolds took leave from Johns Hopkins to serve in 1942-1943 as chief economist of the War Manpower Commission, and in 1943-1945 as a public member of the Appeals Committee for the National Labor Relations Board. At these institutions, he successfully labored to prevent wartime budget deficits from turning into price and wage inflation.
During and after the war, Reynolds served widely in governmental and private agencies as labor mediator, consultant, officer and committee member, lending his analytic, organizational and administrative skills to the Bureau of the Budget, the Agency for International Development, the Industrial Relations Research Association, the Ford Foundation, the National Bureau of Economic Research and the American Economic Association.
In 1945, Reynolds joined the Yale faculty, where he remained for 35 years until his retirement in 1980. In 1951, he became chair of Yale’s Department of Economics. In the next eight years, he increased the number of faculty in economics from 31 to 65, including such notable scholars as William Fellner, Tjalling Koopmans, John Montias, Hugh Patrick, Gustav Ranis, James R. Tobin, Robert Triffin and Henry Wallich. Two later won Nobel Prizes. A third Nobel Laureate, Simon Kuznets, was soon wooed back to Harvard.
In later years, Yale President Kingman Brewster liked to tell the story of meeting Reynolds on Martha’s Vineyard. Brewster remembered asking Reynolds, “Would you take me out behind the barn some day and tell me how it is you turned one of the worst departments in the country into one of the best?”
“I don’t have to take you out behind the barn,” replied Reynolds. “It’s very simple — just be willing to hire people who are brighter than you are.”
Early in his term as chair, Reynolds confronted the firestorm caused by the publication of “God and Man at Yale,” in which William Buckley criticized “the hot collectivist turn taken by the [economics] faculty after the war” and argued that such faculty should be fired. “Whit Griswold [Brewster’s predecessor as Yale president] sent me out on the road,” he liked to recall, “with the football coach, to talk to the alumni. Usually the coach spoke first, and after that … the alumni didn’t much want to hear about the economics department.”
Twice during the 1950s, Reynolds took brief leaves from Yale to direct the Ford Foundation’s new program of support for developing countries. At the end of that decade, he convinced Ford to donate $15 million to establish the Yale Economic Growth Center, where he served as founding director until 1967. The center annually brings together about 30 faculty and visiting economists studying the growth process.
When Reynolds retired from Yale, the Graduate School minutes recorded a tribute which reads in part: “[I]n the early 1950s, he was able to convert a spirited defense of the department against right wing critics into an occasion for the substantial infusion of outside resources. It was his great capacity to recognize talent in others which helped attract a first-rate faculty, including the move of the Cowles Commission to Yale.”
In 1949, Reynolds published “Labor Economics and Labor Relations” (Prentice Hall). Now in its 11th edition, this textbook is widely credited with creating the field of labor economics. Over the course of a half century, Reynolds published 10 scholarly books and dozens of articles in the fields of labor economics, economic development and comparative economic systems. He published five introductory economics texts, trying his ideas out first on Yale’s undergraduates. Reynolds was an institution at Yale graduations, where for more than 30 years, as senior fellow of the college, he carried the Berkeley mace as he led the seniors into the Old Campus.
Reynolds had a lifelong fascination with mountaineering, a passion that took him to the summit of Mt. Blanc at age 23, and to the top of Kilimanjaro at age 41. In his 50s, on three Nepal treks with his wife, he reached the Mt. Everest Base Camp and the Annapurna glacier.
Reynolds was married for 63 years to Mary Trackett Reynolds, who died August 28, 2000. He is survived by three children, Anne Skinner of Williamstown, Massachusetts, Priscilla Roosevelt of Washington, D.C., and Bruce Reynolds of Charlottesville, Virgina; as well as seven grandchildren and eight great-grandchildren. He was a member of the Century Club of New York, the Cosmos Club in Washington and the West Bend (Wisconsin) Country Club.
A memorial service in Reynolds’ honor will be held at 1:30 p.m. on Saturday, June 11, in Battell Chapel, corner of Elm and College streets.
By Lloyd G. Reynolds, Chairman of the Department of Economics.
The following paper was delivered by Mr. Reynolds at the meeting of the Alumni Board on October 20th. During the meeting the Board passed a unanimous resolution that it should be published in the November issue of Y.A.M.
AMERICAN economists in 1951 are doing about the same things they have been trying to do for the past hundred and fifty years. First, we aim to present a clear picture of what the economic system looks like and how it operates. How many business concerns, big and little, are there in the United States? How are they organized and managed? How much money do they take in and pay out, and for what purposes? How many people work for a living in the United States? What work do they do and how much are they paid for doing it? A great deal of economics is concerned simply with providing an accurate description of our economic institutions and how they have changed over the course of time.
Economic Analysis
BUT economists are not content to operate only at the level of description. We are interested always in the question of why things happen as they do in the economy. Why does one kind of work pay 80 cents an hour and another $1.50? Why does wheat sell for $2.50 a bushel and cotton for 33 cents a pound? Why has the retail price level risen by 10 per cent since June 1950? In order to answer this sort of question one needs not only a knowledge of facts but methods of arranging and thinking about the facts — in short, what we call economic theory or economic analysis. Theory is not just day — dreaming or idle opinion. It plays much the same role in economics as in physical science. It is a way of organizing and focussing facts to explain and predict economic events.
Economics aims to be, and is steadily becoming, a factual, quantitative science. It aims to get behind mere opinion to a solid basis of truth. The tests of an economist are these: is he thoroughly grounded in the facts and the history of our economic system? Has he mastered the methods of analysis which economists have gradually been developing over the past century and more? Can he use these methods with skill and good judgment to explain and predict actual developments in the economy? If he cannot pass these tests, it does him no good to come around claiming that he is a warmhearted fellow who wants to improve the lot of the workingman, or that he is a sound conservative and a hundred per cent American. If he cannot pass the tests, we would not trust his judgment, we would not give him an advanced degree in economics, we would not employ him for the Yale faculty.
I want to make it clear that economics and politics are quite different things. The study of economics can of course be applied to political issues — it would not be of much use otherwise. Our courses involve discussion of taxation systems, tariffs, the federal budget, labor laws, social security, foreign economic aid, agricultural price supports, and a host of other issues. But the job of an economist with respect to these issues is not to say what policies should be followed. His task is to discover and point out the consequences of different possible policies. Ideally, economics should be able to say what will happen if the tariff on pottery is reduced by ten per cent or the federal minimum wage is raised ten cents an hour. Whether the public, or our students, like and approve what will happen is up to them. Economics is not politics, and it is not up to us to sway people in one political direction rather than another.
Ground Rules
ECONOMISTS are also human being of course, and I see nothing wrong with an economist occasionally expressing his personal opinion on a political issue. But he should be careful to point out when he is stepping out of his shoes as a scientist and speaking as a plain citizen. He should also be mindful of contrary opinions, and should not strive just to convert his hearers to his own point view. I believe that these ground rules are well observed in the teaching of economics at Yale. I don’t think there is much political preaching in our courses and if there is some it is certainly not all on the same side. The department includes everything from Roosevelt Democrats to Hoover Republicans, and our students have ample opportunity for exposure to different points of view.
This brings me to my main point — the state of the Yale Department of Economics and its prospects for the future. I note first a substantial strengthening of our senior staff since the end of the war. In the first year after the war, we had nine teaching members of the department in the rank of assistant professor and above. Today we have sixteen men in the professorial ranks. The newcomers to the department have been most carefully chosen from among dozens of a candidates whom we have considered in the last five years. They are men of whom Yale can well be proud, not only scholars but as individuals. They are highly regarded by their colleagues in New Haven and by their fellow-economists throughout the United States — so much so that we are constantly fending off raids from other institutions which want to hire them away from us.
Our two most recent appointments are Professor Henry Wallich, who comes to us from the Federal Reserve Bank of New York, where he has been chief of research and has also acted as consultant to several of the Latin American countries in the revision of their banking systems; and Professor Robert Triffin, who has had a distinguished career with the Federal Reserve Board, the International Monetary Fund, and as American representative on the governing board of the European Payments Union. These men, both excellent economists with a wealth of practical background, have at one stroke put us ahead of any university in the country in the area of international finance and international trade.
Research and Teaching
NOW a word about the job which we are trying to do here. As scholars, we are all concerned with trying to push back the frontiers of knowledge in our chosen field. During the last two years alone, members of the department have published ten books on subjects as diverse as the pricing of military supplies, the effect of federal taxation on executive compensation and retirement systems, the history and structure of the American cigarette industry, and the human relations problems of a large public utility company. We have other studies currently in process, some of which I will mention in a moment. I do not think that any department of economics in the country excels the Yale department in terms of the quality and significance of its research work.
Our main responsibility in the University, however, is for teaching. How are we doing on this front? Judging from the comments of the students who come though my office, and from other reliable sources of student opinion, I would say that about half of our undergraduate courses are excellently taught. The other half are good solid courses but not outstanding, and we may even have one or two which are a bit on the dull side. The department has currently under way a thorough study of our course offering and degree requirements in the College, and we are of course seeking continuously to strengthen the teaching staff in areas of weakness. We expect that these efforts will bear fruit in a steady increase in the quality of our teaching work.
Our most difficult teaching problem has been the course in elementary economics, Economics 10. It is enormously difficult to cover all aspects of the economic system in a year’s time and to arrange the material in the best possible way. No one textbook or combination of textbooks is ever fully satisfactory. I can assure you that the Department has given much prayerful thought to this matter over the past five years. We have changed both the structure of the course and the reading assignments almost every year. The course is still not ideal — it never will be — but it is a good deal better than the course we were giving four or five years ago.
An even more serious problem in this course has been to find enough fully qualified instructors. We were faced just after the war with the largest enrollment in the history of the University. In the peak year we had almost fifty divisions of Economics 10, requiring a staff of 20 to 25 instructors. There are just not that many good economists, even at Yale. We were forced to take on a considerable number of partially-trained men from the graduate school as teaching assistants, often on very short notice. Some of these men turned in an excellent teaching job but we also drew a few lemons who had to be dropped after a short time.
This phase is now happily behind us. Enrollments have declined to a more normal level, and we are much better staffed to handle them. Of the nine men teaching in Economics 10 this year, only one is without previous teaching experience; and this man is a mature individual who in fact owned and operated a profitable business for several years before coming here for graduate study.
The central purpose of our teaching work is to give students an understanding of the history and present operation of American economic institutions, and to train them to think systematically about the economic issues of the day. We hope to develop habits of reflection and careful analysis which will stand our students in good stead as they emerge to take their place as citizens and as leaders of public opinion.
We are not trying to sell the American economic system to our students as one might sell a package of breakfast food. We believe that such an approach is both futile and unnecessary. We have found from experience that, if our economic institutions are carefully explained and thoroughly understood, the great majority of students will support them of their own accord. They will support them, not in a spirit of blind adherence to a fixed creed, but with an understanding of why they prefer our system to any sort of totalitarian regime. They will seek to perpetuate American institutions, not by freezing them into a fixed mold, but by striving constantly to improve them over the years to come. This outlook, which I would term intelligent conservatism, is characteristic of most of our faculty members and most of our student body.
How do our students come out from this sort of training? If you could read the departmental examinations which our economics majors write at the end of the senior year, I believe you would find that most of them show a good grounding in economic facts and economic analysis. They also show a healthy diversity of political viewpoint. We do not and should not turn out students whose minds are tailored to a particular pattern. If a student is intellectually honest, accurate in his use of facts, willing to state his basic premises, capable of reasoning logically from those premises — then I respect him. Let him come out where he will, politically speaking. I believe this is good American doctrine and sound educational policy.
I realize that some people hold a contrary point of view. They believe that the function of an economics department should be to propagandize students for a particular political and economic creed, that only professors willing to swear allegiance to this creed should be allowed to teach, and that students should be carefully protected against contrary opinions. This totalitarian outlook, though it has had much success in Europe, seems to me completely at variance with American traditions. The members of the economics department at Yale would, I am sure, be unalterably opposed to the establishment of any official party line on economic questions. I do not see how a free university in a democratic country can take any other view.
Now before closing I want to admit in all humility that there are many things wrong with our understanding of economics and our teaching of it. A great deal of the economics currently taught in universities is undoubtedly unrealistic, ivory-tower, out of touch with the facts of economic life. Too many of the books which we read and teach were written strictly in the library. Too many of our teachers of economics have had no contact with practical affairs.
I want to assure you that this ignorance of the real world is not deliberate on the part of the professors. It comes about mainly because of the way in which young economists are trained and employed. On finishing college, a prospective economist is usually advised to go directly into graduate school to work toward the hallowed Ph.D. without which his future career is hopeless. If he is a really good student he may receive a fellowship to support him in his studies. This phase lasts at least three or four years, during which time he spends his life mainly in the classroom and the library. As he hears the end of his graduate training, he begins to cast about for a job and, if he is capable and lucky, he lands an instructorship somewhere. But he is now being paid to educate students, and only incidentally to educate himself. He is not especially encouraged to wander outside the academic walls. If he does so on his own initiative and tries to learn something about business operations, he may quite possibly be rebuffed by executives who are busy with their own affairs or worried at the idea of stray professors wandering around the plant.
I am very conscious, and I believe any economist who has had much contact with industry is conscious, of how much economists have to learn about the facts of life and how wide a gap still exists between economic theories and business practice. I have given much thought to the question of how young teachers in their formative years can gain more experience of practical affairs, and have a few ideas on the subject. The difficulty, is that all of my ideas would cost money and money is not the most plentiful thing on the University scene.
We are not taking a defeatist view of this problem. We have already made some beginnings toward building bridges between industry and the University community. Professor Healy’s work in transportation has brought him into close contact with the largest railroad systems in the country. Professor Bakke’s studies of human relations in industry have included a thorough analysis of the management structure of a large New England Company, and he is going on from this to similar studies in other companies. I am currently working, along with my colleague Professor Miller, on a study of top management organization and policy which will involve discussions with the top officers of a dozen or so companies. Professor Westerfield, who has been in charge of our teaching of money and banking for many years, is president of a highly successful savings and loan association. Professor Wallich, I am sure, will not neglect his banking contacts in New York because of his move to New Haven.
We believe in this sort of thing and hope to develop it increasingly in the future. We consider that the factories, stores and offices of the country are the laboratories in which a real science of economics can be developed. There are difficulties, of course, in using these laboratories without upsetting normal business operations, but we are confident that these difficulties can be overcome. We believe that in this way the practical experience of men of affairs can be gradually translated into economics textbooks and economics teaching. If some of you can take a little time from your businesses to educate us, we shall stand a better chance of educating our students. Until both you and we have done more in this direction, economics will continue to be too largely an ivory tower subject.
I have tried to give a realistic picture of our present situation, not simply a rosy one. We are certainly doing a better job than we were doing five years ago, and five years ahead we expect to be doing still better. But we are not complacent about our progress. We realize that we have still a long way to go and will never do the job perfectly. We welcome advice and suggestions on what we are doing. We hope for sympathetic interest and support.
Source: Yale Alumni Magazine (November 1951), pp. 18-20. A copy of this article was provided to Economics in the Rear-view Mirror directly by the Yale AlumniMagazine. On behalf of the history of economics community I thank the executive editor, Mr. Mark Branch for his help.
It was fifty years ago this September that I entered the graduate program in economics at M.I.T. This is why the brochure outlining the graduate program as of the academic year 1974-75 is something I am particularly delighted to add as the newest digitized artifact to Economics in the Rear-view Mirror.
In other news, I just realized that I am now older than everyone seen on the faculty portrait taken in 1976.
_______________________
Most of the faculty members of the MIT department of economics on the steps of the Sloan Building (E52) in 1976.
Graduate study in economics began at M.I.T. in 1941 and has since developed to its present size of some 110 full-time students and 33 faculty members. Its major emphasis is on the training of doctoral candidates in a broad program of advanced study and research for professional careers in universities or colleges, in governmental and private research organizations, or in business or financial concerns. At the present time the demands on a professional economist are such that the depth and breadth of the doctoral program have become indispensable training for a successful career. The Department, therefore, ordinarily admits to full-time graduate study only candidates for the Ph.D. In order to maintain a close and continuing contact between students and faculty, the entering class is normally held to 30.
The doctorate normally requires the full-time concentration of the student for three or four years. Formal requirements are limited in number. The candidate must (1) demonstrate a mastery in five fields of study in economics, one of which is economic theory, both micro and macro; (2) achieve a specified level of competence in economic history, econometrics, and statistics; (3) submit and defend a dissertation that represents a contribution to knowledge; and (4) be in residence for a minimum of two years.
These requirements are met not merely by passing some appropriate set of subjects, but through an over-all preparation of subject matter and techniques that goes beyond course work. Candidates may differ in their rate of progress toward the satisfaction of these requirements, depending on their background, preparation, and interests. Normally, however, the satisfaction of requirements, other than the dissertation, is completed by the end of the second year.
The dissertation is a test of the candidate’s ability to conduct independent research — to formulate a significant topic and to bring to bear on it the analytic and quantitative tools of economics. The dissertation is prepared under the direction of departmental committee. Upon submission of the completed thesis, the candidate is examined orally by the thesis committee.
The Department has no general foreign language requirements. When a foreign language is essential for full access to the literature in the field of the student’s major interest (for example, European Economic History, Communist Economies) or to his thesis research, a language requirement will be imposed by the Department upon the recommendation of the Thesis Supervisor or the Graduate Registration Officer. Such a requirement will be administered by the Department of Foreign Literatures and Linguistics, and can be met by satisfactory course work at other schools, at M.I.T., or by examination.
Occasionally students may desire a program that overlaps more than one department, but which in content and depth meets doctoral standards. At the initiative of the student, and with the approval of faculty members of each department, arrangements can be made to have the Dean of the Graduate School appoint a committee to guide the entire Ph.D. program. For details see the Graduate Student Manual. One such program, for instance, has been worked out with the Department of Urban Studies and Planning.
In very special and rare cases, students are admitted for study programs leading to the M.S. in Economics. This is awarded upon the satisfactory completion of a program, approved by the Graduate Registration Officer, of a year’s full-time study, including the presentation of a satisfactory thesis. The master’s program usually involves completion of the Department’s core requirements (see below), a semester of econometrics, and two semesters of a special field, in addition to the thesis.
To be admitted into the program, a student must hold a Bachelor’s degree or its equivalent from an accredited college or university. It is not essential that the undergraduate degree be in economics. Graduate students entering the Department have had a wide variety of major background preparation varying from literature to physics. Some preparation in undergraduate economics, especially in economic analysis, is almost a necessity. Candidates who, upon admission, are deficient in mathematics are strongly urged to take mathematics in the summer before entering the program or work on a recommended self-study program in calculus to prepare for 14.102 Mathematics for Economists.
Completed application forms for admission must be submitted to the Admissions Office at M.I.T. by January 15 of the calendar year in which the applicant wishes to enter. In addition to the Institute application forms, the Department expects each applicant to submit a statement (one or two pages) explaining his interest in economics. An informal questionnaire is provided for his general guidance. Entrance is normally in September. February entrance is granted only under exceptional circumstances, since many subjects given in the spring are continuations of work given in the fall.
All applicants are urged to take the Graduate Record Examinations no later than the January preceding the September in which they wish to enter. They should take the quantitative and verbal aptitude tests as well as the test in economics. (Information can be obtained by writing to Graduate Record Examinations, Educational Testing Service, Box 955, Princeton, New Jersey 08540. Students in western states or in eastern Asia or the Pacific should write to 1947 Center Street, Berkeley, California 94704.)
Decisions regarding admission are the responsibility of the Departmental Graduate Admissions Committee, which bases its judgment on the undergraduate academic record of the applicant, both in general and with respect to particular subjects, on the letters of recommendation, and on the Graduate Record Examinations. Further information may be secured by writing to the chairman of the committee. Notices of acceptance are sent out by April 1, and candidates have until April 15 to notify the Department of their choice.
Fellowships, Scholarships, and Financial Assistance [Table of Contents]
While in the past virtually all graduate students received financial aid through scholarships, fellowships, or assistantships, the financial situation has changed to such an extent that complete support can no longer be assured. Moreover, the outlook is so uncertain that no definite statement is possible, even about minimum aid. Every effort will be made within the limits of our financial resources to support students who perform effectively. In view of this uncertainty, the Department is making efforts to expand the number of research assistantships, but students should expect to earn or borrow a larger proportion of their support than has been true in the past.
The sources of financial support are varied. (1) Many students are assisted by fellowships for which there is a national competition, such as those given by the National Science Foundation (NSF), the Ford Foundation, the Danforth Foundation, the Canada Council, and by foreign governmental agencies. Applications for such fellowships must be made directly to the appropriate foundation or agency, and an application for admission must also be made to M.I.T. (2) Awards of scholarships or fellowships are also made from M.I.T. funds or endowments. These include the Hicks Fellowship in Industrial Relations, the Graduate Economics Alumni Fellowships, endowed Institute fellowships, and a limited number of departmental awards. (3) A third group of students is supported by part time teaching and research assistantships and instructorships. In the past, research and teaching assistantships have been limited to candidates who have passed their general examination and are engaged in thesis research. However, in the light of the present financial stringency, these rules may be relaxed somewhat with respect to limited research assistantships for second year students. (4) Finally, students in good standing can avail themselves of loans through the Office of Financial Aid. U.S. citizens who are planning to be teachers may avail themselves of an NDEA loan, a substantial portion of which is forgiven upon entry into and continuance in teaching. They are also eligible for government-insured loans that are partially subsidized. Foreign students. however, may borrow only through the Graduate Loan Fund at the prime interest rate.
Entering students should apply for financial aid not later than January 15 of the calendar year in which they plan to enter. First-year awards are made on April 1, and applicants are given until April 15 to accept. Departmental awards for second and subsequent years are made in June. It is entirely appropriate for students to apply both for national awards and to M.I.T., since the outcome of national competitions is known before our awards are announced. Fellowships normally will include some cash payment toward living expenses, up to $2,000 for a single or married person without dependents, made in two equal installments at the beginning of each term. In offering scholarships and fellowships, the Department takes into account need as well as professional promise.
Remuneration for research assistantships varies, but in 1974-75 is normally at the rate of $6,585 per academic year for half-time work, out of which tuition of $3,350 must be paid. A half-time teaching assistantship in 1974-75 covers the tuition and pays $3,510 for the academic year — a total of $6,860. A very few half-time instructorships, for students who have demonstrated conspicuously effective teaching as an assistant, cover tuition plus $4,345 for living expenses — a total of $7,695 for the academic year.
As a supplement to academic-year appointments, both interdepartmental and departmental research groups are possible sources of full-time summer employment.
The academic performance of the student body is periodically reviewed to determine whether or not normal academic progress is being made. Failure to maintain normal progress may result in reduction or withdrawal of financial support. Students are invited at all times to discuss academic problems with their graduate registration officer, and the Department makes every effort to accommodate the needs of individual students.
The Department has always welcomed foreign graduate students. They have typically constituted a significant portion of the student body. Some M.I.T. fellowships are available to entering foreign students, though the number is limited and the competition severe. Foreign students have an additional burden of transportation expense to cover and for this reason it is highly desirable to try to obtain at least partial support from other sources as well.
General information on scholarships, grants and travel can be obtained from the Institute of International Education, 809 United Nations Plaza, New York, New York, 10017, or from the Cultural Affairs Officer or the United States Information Service Office nearest the student’s place of residence.
Foreign applicants are required to submit evidence of their ability to carry on studies in English. Applicants whose native language is not English are required to take the test of English as a Foreign Language (TOEFL). Students whose schooling has been in English may request a waiver from the Advisor to Foreign Students at M.I.T. TOEFL is administered by the Educational Testing Service, Princeton, New Jersey, 08540; registration material and information about the test may be obtained by writing to the above address.
The Department is located in the Sloan Building, which, along with the adjoining Hermann Building, contains contiguous faculty offices, classrooms and seminar rooms, and student and faculty lounges. This complex also houses the Sloan School of Management, the Department of Political Science, and the Center for International Studies. The Dewey Library occupies two floors of the Hermann Building and contains the social science collection at M.I.T., reading rooms, and carrels to which thesis writers are assigned individually.
On-campus housing for graduate students is limited. Applications should be sent to the On Campus Housing Office, Room E18-307, M.I.T. Help in securing off-campus housing is given by the Community Housing Service, E18-306, M.I.T. Students should be alerted to the fact that Cambridge rental units are limited and in heavy demand. Transportation is convenient; the Sloan Building is located one block from the Kendall Square subway station.
The Graduate Economics Association, composed of all graduate students, is a lively organization that sponsors monthly seminars and social events, and is one of the channels through which mutual student-faculty problems are discussed. The seminars permit discussions of current research by distinguished economists and occasional dialogues between faculty members. They are often followed by small dinners to which graduate students and faculty are invited, permitting more discussion among visitors, students and faculty. The Association annually elects nine student representatives to participate as voting members in Department meetings and other Department committees. Student representatives are full participants in all matters except those involving specific, identifiable individuals, or undergraduate matters. This policy at present excludes the discussion of details, but not the general policy, of tenure decisions, review of non-tenure faculty, new appointments, review of student performance, admissions and financial support.
The Black Graduate Economics Association provides a forum for the development and utilization of economic tools for solving the problems faced by Black people, encourages policies and programs which help increase the supply of highly qualified Black economists, opens lines of communication with other Black graduate students, Black economists, and the Black community, stimulates academic excellence, and provides outlets for various social activities. The BGEA has helped develop audio-visual aids now in use in many Black colleges’ economics departments, engaged in Institute recruiting projects, and participated in conferences of Black economists and administrators of Black colleges and universities. An econometric model of income and expenditures in Black communities is in its initial stage of development as a research project.
Students who complete the Ph.D. program should have a thorough understanding of the existing principles of economic theory and of the economic structure; an ability to think systematically about, and apply quantitative methods to, economic problems. The program gives roughly equal emphasis to these two goals, with formal courses and examinations to meet the first, and seminars, workshops, papers and the dissertation to meet the second. The student spends most of his first two years attempting to understand the existing ideas of economics. A basic principle of the program is that these ideas are sufficiently worthwhile so that their study is a necessary prelude to their use or criticism.
Throughout the program, there are formal provisions for students to engage in original work. During the first two years, term papers are often required. During the second year each student prepares a research paper as part of the requirement in econometrics. Second-year students are also encouraged to take part in workshops in their fields of primary interest. After passing the general examination, at the end of the second year or earlier, students spend full time in their own independent, original work. Their only formal obligation is to participate actively in the weekly meetings of the workshops in their fields of research.
The core in economic theory consists of two subject-years equally divided between microeconomics (14.121-14.124) and macroeconomics (14.451-14.454). These subjects are described in Section III of this report. The material is divided into half-semester subjects. The microtheory sequence starts in the fall term and runs through the first year, while the macrotheory sequence starts in the spring term and continues through the fall term of the second year. A qualifying examination on these subjects is offered three times a year — in September, December-January, and May — that must be passed in order to satisfy this part of the core requirement. The examination will cover each of the eight portions of the theory core, and a syllabus is available for each.
When a student feels sufficiently well qualified in the subject matter of any of the theory core subjects, he may take the qualifying examination, either before or after a particular set of lectures is offered. Only a passing grade is recorded when the examination is taken in advance of the lectures. If he fails to pass, he can then enroll for that particular section of theory and take the examination again at the end of that term. Should he pass some portion of theory by the preliminary examination, he could substitute a subject in advanced economic theory in the half-term in which he would have taken the basic theory subject. In principle, it is possible to pass all eight units of the theory core in this way and to proceed directly to more advanced work.
The Schedule for the Qualifying Examination in Theory is as follows:
The minimal core requirement in mathematics is calculus and linear algebra. Calculus is required for Statistics (14.381). While not stated as a formal prerequisite for the core theory subjects, it is virtually a necessity for mastering them.
If a student’s preparation in calculus were inadequate to satisfy the prerequisite for 14.102 Mathematics for Economists, the completion of the statistics and economics core requirements would be postponed a year. Econometrics (14.382 and 14.383 and most advanced theory subjects (14.141-14.149) require linear algebra. Students who have had a year of calculus and who want more mathematical training normally would take Mathematics for Economists (14.102) in the first term.
The econometrics and statistics core requirement can be satisfied by (1) Statistics (14.381); (2) either Econometrics (14.382 and 14.383) or Applied Econometrics (14.388); and the completion of a piece of empirical research the equivalent of a term paper. This paper is due by the end of the fall term of the second year.
Entering students who lack calculus, and cannot take 14.102 in the first term, have two choices: either to postpone the three-term sequence: 14.381, 14.382, and 14.383 — to their third through fifth terms, or to take the two-term sequence, 14.381 and 14.388, in their third and fifth terms.
The core requirement in economic history is the satisfactory completion of one subject in American Economic History (14.731), European Economic History (14.733), or Russian Economic History (14.781).
In addition to the satisfactory completion of the core requirements, competence in four special fields must be demonstrated, two by passing a general examination and two by either satisfactory course work or a general examination. Preparation for a field examination normally consists of a year’s course work. Satisfaction of a field by course work alone requires the achievement of a grade of B or better in each of the two terms of subject matter. (The econometrics and history requirements can be satisfied with a grade of B-.) The areas in which the Department offers specialization are: advanced economic theory, international economics, labor economics, economic development, urban economics, monetary economics, fiscal economics, statistics and econometrics, economic history, industrial organization, comparative economic systems, Russian economics, human resources and income distribution, and, outside the Department, finance, production, transportation, and operations research. It is possible to use econometrics as a field without preparation beyond the core requirements. Economic history can be offered as a field by adding a second subject to the one satisfying the core requirement.
Students normally demonstrate competence in all four fields by the end of their second year. That is, they normally finish their required course work and general examinations by that time. In the event that scheduling or other difficulties interfere with this timing, one field other than theory or econometrics (including the paper — see II.B.3 above), or one subject in a field and in history, may be postponed until the third year. Before making such a deferment, students should consult with their Graduate Registration Officer.
Students planning to take the general examination before the end of the second year — the usual time — should consult in advance with their Graduate Registration Officer. In any case, such students would still be held to the above schedule.
*The minimal number of subjects to satisfy the special field and history requirements depends on whether history or econometrics is offered as a special field. If neither are offered, 9 subjects are required; if history, 8 subjects; if econometrics, 7 subjects; if both, 6 subjects.
Upon satisfaction of the core and field requirements, the Ph.D. candidate embarks on original research culminating in a completed dissertation that is defended orally. Thesis writers are required to participate in the workshop most germane to the subject of their thesis over the period of time they are working on it. Upon agreement on a topic with a primary thesis supervisor, a secondary thesis supervisor will be chosen by the student, subject to the approval of the Graduate Committee. A third faculty reader will be appointed by the Graduate Committee in consultation with the candidate when a final draft of the thesis will reasonably be expected to be completed within six months. The third faculty reader will have as his main function the unitary reading of the complete final draft of the thesis. These three faculty members will be the candidate’s thesis committee and are responsible for its acceptance and final defense.
In order to give adequate time for the final thesis review and revision, the completed draft must be submitted for final review a month before the Institute dates for submission of the dissertation. In 1975 the formal Institute dates are January 5, May 2, and August 11.
Introduction to the theory of resource allocation and the price system. Emphasis on the use of efficiency prices as a guide to decentralized decision making.
Economic ideas developed by different groups of economists in recent times.
R. L. Bishop,
P. A. Samuelson
14.141
General Equilibrium Theory
Prereq.:14.124
Units
Year: G(1) (2nd half of term)
2-0-4
General equilibrium. Existence and stability of competitive equilibrium. The core of an economy. (Not offered in 1974-75)
F. M. Fisher
14.142
Mathematical Programming and Economic Theory (A)
Prereq.:14.122
Units
Year: G(2) (1st half of term)
2-0-4
A rigorous treatment of linear and non-linear programming with applications to economic model building, including activity analysis and input-output.
M. L. Weitzman
14.143
Advanced Theory of the Market III (A)
Prereq.: 14.122
Units
Year: G(2) (2nd half of term)
2-0-4
Oligopoly and product differentiation, advertising, equilibria with seasonal or cyclical demand shifts.
R. L. Bishop
14.144
Applied Price Theory
Prereq.:14.122
Units
Year: G(1) (1st half of term)
2-0-4
Applications of price theory treated topically. Selected topics in price theory, with focus changing from year to year. Current emphasis is on the economics of exhaustible and renewable natural resources.
R. M. Solow
14.145
Economics of Uncertainty
Prereq.:14.124
Units
Year: G(2)
3-0-9
Individual behavior under uncertainty. Equilibrium and welfare under uncertainty. Search and information.
J. A. Hausman,
P. A. Diamond
14.148
Advanced Topics in Microeconomic Theory (A)
Prereq.:14.124
Units
Year: G(2)
Arr.
14.149
Advanced Topics in Microeconomic Theory (A)
Prereq.:14.124
Year: G(2)
Arr.
Advanced topics in microeconomic theory of current interest.
Staff
14.151
Mathematical Approach to Economics (A)
Prereq.:14.122
Units
Year: G(2)
3-0-6
The use of mathematical methods in all the fields of economics.
P. A. Samuelson
14.191
Economics Seminar (A)
Prereq.:14.121, 14.122
Units
Year: G(1)
3-0-6
14.192
Economics Seminar (A)
Prereq.:14.121, 14.122
Year: G(2)
3-0-6
Special economic problems. In 1974-75, 14.192 — Economics of Public Sector.
J. Rothenberg
14.193
Seminar: Topics in Economics (A)
Prereq.:14.121, 14.451
Units
Year: G(1)
3-0-6
14.194
Seminar: Topics in Economics (A)
Prereq.:14.122, 14.452
Year: G(2)
3-0-6
Topics in economics of current interest.
Staff
14.195
Reading Seminar in Economics (A)
Prereq.:14.122
Units
Year: G(1)
Arr.
14.196
Reading Seminar in Economics (A)
Prereq.:14.122
Year: G(2)
Arr.
Reading and discussion of special topics in economics. (Open to advanced graduate students by arrangement with individual numbers of the staff.)
Staff
14.197
First-Year Graduate Seminar (A)
Prereq.: 14.04
Units
Year: G(1)
2-0-6
Seminar limited to first-year graduate students. Discussion of projects of students, professional literature, methodology, economic policy, extending beyond regular curriculum.
Problems in Industrial Economics (A)
Prereq.: 14.04
Units
Year: G(1)
3-0-6
Small and large enterprises in the American economy; market structures; degrees of monopoly and competition; requisites of public policy.
M. A. Adelman
14.272
Government Regulation of Industry (A)
Prereq.: 14.271
Units
Year: G(2)
3-0-6
Follows 14.271. Development of anti-trust policy, generally and in specific cases. “Public utility” price fixing, government ownership as alternative.
P. L. Joskow
14.291
Industrial Economics Seminar (A)
Prereq.:14.271
Units
Year: G(1)
3-0-6
14.292
Industrial Economics Seminar (A)
Prereq.:14.271
Year: G(2)
3-0-6
Readings, discussions, reports on such topics as industrial price policies, government regulation of industry, competitive practices, and similar problems in industrial economics.
A compact one-term course in elementary probability and statistical Inference. Axiomatic probability, random variables, distribution functions, mathematical expectation, generating functions, transformations of random variables, simple correlation and regression models, the normal distribution, sampling theory, point and interval estimation, maximum likelihood, least squares, testing statistical hypotheses. The exposition is somewhat more mathematical than
14.381.
H. A. Freeman
14.373
Time-Dependent Probability (A)
Prereq.: 14.371 or 18.303
Units
Year: G(2)
3-0-6
Markov chains and Markov processes, the relevant ergodic theorem, Kolmogorov equations, time series theory; spectral density functions, harmonic representation, autoregressive models.
H. A. Freeman
14.374
Design and Analysis of Scientific Experiments (A)
Prereq.: 14.381
Units
Year: G(2)
3-0-6
Application of statistical theory to the design and analysis of scientific experiments. Factorial and fractional factorial designs. Applications to experimentation in the physical, chemical, biological, medical, and social sciences.
H. A. Freeman
14.381
Statistical Method in Economics (A)
Prereq.: 14.101 or 18.02
Units
Year: G(1)
4-0-8
Self-contained introduction to probability and statistics which serves as a background for advanced econometrics. Elements of probability theory, sampling theory, asymptotic approximations, decision theory approach to statistical estimation focusing on regression, hypothesis testing and maximum likelihood methods. Illustrations from economics and application of these concepts to economic problems.
J. A. Hausman
14.382
Econometrics I (A)
Prereq.:14.102, 14.381
Units
Year: G(2)
4-0-8
14.383
Econometrics II (A)
Prereq.:14.382
Year: G(1)
4-0-8
Theory and economic application of the linear multiple regression model. Identification and structural estimation in simultaneous models. Analysis of economic policy and forecasting in macroeconomic models. A term paper involving substantive original empirical research is required in 14.383.
R. F. Engle, R. E. Hall, J. A. Hausman
14.386
Advanced Topics in Econometrics (A)
Prereq.: 14.383
Units
Year: G(2)
3-0-6
Selected topics including specification error, non-linear estimation, simulation, aggregation, and the derivation of economic policy models. (Not offered in 1974-5)
R. F. Engle, R. E. Hall, J. A. Hausman
14.388
Applied Econometrics (A)
Prereq.: 14.102, 14.381
Units
Year: G(1)
3-0-9
Theory and practice of econometrics. The linear regression model, tests of hypotheses, generalized least squares, distributed lags, and simultaneous equations. Emphasis on applications. A term paper required.
R. F. Engle
14.391
Workshop in Economic Research (A)
Prereq.:14.124, 14.454
Units
Year: G(1)
2-0-10
14.392
Workshop in Economic Research (A)
Prereq.:14.124, 14.454
Year: G(2)
2-0-10
Designed to develop research ability of students through intensive discussion of dissertation research as it proceeds, carrying out of individual or group. research projects, and critical appraisal of current reported research. Workshops divided into various fields, depending on interest and size.
Macroeconomic analysis of general equilibrium. Financial markets and investment. Intertemporal equilibrium and growth models.
S. Fischer
14.452
Macroeconomic Theory II (A)
Prereq.: 14.451
Units
Year: G(2) (2nd half of term)
2-0-4
Determination of aggregate output, employment, and prices under static conditions. Keynes and alternate theories. The Phillips Curve. Inflation in the short and long run.
R. E. Hall
14.453
Macroeconomic Theory III (A)
Prereq.: 14.452
Units
Year: G(1) (1st half of term)
2-0-4
Quantitative macroeconomics. Consumption, investment, and other components of aggregate demand. Structure of complete econometric models of the U.S. economy
Advanced Topics in Macroeconomic Theory (A)
Prereq.: 14.454
Units
Year: G(1)
Arr.
14.459
Advanced Topics in Macroeconomic Theory (A)
Prereq.: 14.454
Year: G(2)
Arr.
Advanced topics in macroeconomic theory of current interest.
Staff
14.462
Monetary Economics I (A)
Prereq.: 14.122, 14.452
Units
Year: G(2)
3-0-6
Examination of sources and determinants of supply of money with special attention to roles of commercial banks, Federal Reserve System, and Treasury. Discussion of nature of demand for money. Role of monetary policy in determination of level of economic activity. (Not offered in 1974-5; substitute 15.432 Capital Markets and Financial Institutions)
F. Modigliani
14.463
Monetary Economics II (A)
Prereq.: 14.122, 14.452
Units
Year: G(1)
3-0-6
General equilibrium theory of money, interest, prices, and output; portfolio problems, cost of capital, and the effects of monetary phenomena on investment and accumulation of wealth with special reference to problems arising from uncertainty.
S. Fischer
14.471
Fiscal Economics I (A)
Prereq.:14.122, 14.452
Units
Year: G(1)
3-0-6
14.472
Fiscal Economics II (A)
Prereq.:14.122, 14.452
Year: G(2)
3-0-6
Examination, both theoretic and quantitative, of governmental fiscal institutions and behavior: the budget process, taxation, expenditure, pricing, and debt activities.
P. A. Diamond, A. F. Friedlaender
14.482
Income Distribution Economics (A)
Prereq.: 14.124
Units
Year: G(1)
3-0-9
Modern theories and empirical studies of the determinants of the distribution of income and wealth.
L. C. Thurow
International, Interregional, and Urban Economics [Table of Contents]
14.572J
Regional Economic Analysis (A)
Prereq.: 14.03 or 14.05
Units
Year: G(2)
3-0-6
Analysis of regional economies with emphasis on the sources, characteristics, and implications of spatial concentrations of economic activities. Urban development in its regional setting is examined and the special problems of lagging areas in both developing and developed countries. Methods of integrating national and regional planning.
J. R. Harris
14.573J
Urban Economic Analysis I (A)
Prereq.: 14.03 or 14.05
Units
Year: G(1)
3-0-6
Patterns and processes of growth and structural change within metropolitan areas. The land use market and the spatial structure of the metropolitan community. The housing market: demand and supply, growth, aging, and renewal. The urban transportation system and its problems. Models of the metropolis. In each of these topics, emphasis on the resource allocation process, its efficiency and implications for income distribution.
W. C. Wheaton
14.574J
Urban Economic Analysis II (A)
Prereq.: 14.573J
Units
Year: G(2)
3-0-6
Continuation of 14.573J. The nature and problems of government decision-making in metropolitan areas. The economies of segregation, congestion, and pollution in the metropolitan area. Urban-suburban relations; market and government. Welfare economics and the normative theory of local public policy. Applied normative analysis: criteria for public expenditures; cost benefit analysis. Examination of public policy issues in current urban problems; poverty, race, the spatial form of the city, optimal land use patterns, growth and renewal, development and new communities.
J. Rothenberg
14.581
International Economics I (A)
Prereq.: 14.04, 14.06
Units
Year: G(1)
4-0-8
Theory of international trade and applications in commercial policy.
J. N. Bhagwati
14.582
International Economics II (A)
Prereq.: 14.581
Units
Year: G(2)
4-0-8
Adjustment in international economic relations with attention to foreign exchange markets, balance of payments, and the international monetary system.
Primary emphasis on the structure of labor markets and the determinants of wage levels, unemployment, the distribution of income and employment opportunity. Special attention will also be given to the impact of unions on both wage and non-wage elements of collective bargaining in the light of the characteristics and objectives of particular unions. Other special topics growing out of recent research in labor economics.
M. J. Piore,
C. A. Myers
14.672J
Public Policy on Labor Relations (A)
Prereq.: 14.64, 15.663
Units
Year: G(1)
3-0-6
Major trends in legislation and other government activities affecting the work place. Topics include wage and price controls, equal opportunity employment, and government regulation of union organization, collective bargaining, industrial disputes, wages and hours of work, and work-place health and safety. The broad economic and social questions raised by these trends also explored.
M. J. Piore
D. Q. Mills
14.674J
Comparative Systems of Industrial Relations and Human Resource Development (A)
Prereq.: 14.64, 15.663
Units
Year: G(2)
3-0-6
International and comparative analysis of industrial relations systems and systems of human resource development. Concentration on an examination of selected issues involving interest groups and the strategies of economic development, including discussion of the nature and functions of labor and management organization in different contexts; the role of the state in establishing procedures and in shaping the substance of industrial relations; the participation of interest groups in the formulation of economic and social policy: manpower and economic growth in the context of comparative systems of human resource development; worker participation in management, and other topics.
Research Seminar in Industrial Relations (A)
Prereq.:14.671J or 14.672J
Units
Year: G(1)
3-0-6
14.692J
Research Seminar in Industrial Relations (A)
Prereq.:14.14.691J
Year: G(2)
3-0-6
Discussion of important areas for research in industrial relations, frameworks for research, research techniques, and methodological problems. Centered mainly on staff research and the thesis research of advanced graduate students
C. A. Myers
14.672J
Public Policy on Labor Relations (A)
Prereq.: 14.64, 15.663
Units
Year: G(1)
3-0-6
Major trends in legislation and other government activities affecting the work place. Topics include wage and price controls, equal opportunity employment, and government regulation of union organization, collective bargaining, industrial disputes, wages and hours of work, and work-place health and safety. The broad economic and social questions raised by these trends also explored.
Survey of the beginnings of American industrialization, emphasizing a quantitative approach and the nineteenth century. Topics include effects of government economic policies, such as land distribution and tariffs, the importance of railroads, profitability of slavery.
A comparative study of the major problems in Russian economic history prior to 1917 both for their own sake and as a background for understanding of the events of 1917 and of the Soviet policies since. The topics covered vary yearly depending on the interests of the participants, but the land and peasant problems and industrialization methods emphasized.
Development of the European economy since 1750 and, especially since 1850, with emphasis on growth and slowdown, the transition from local to national and European-wide institutions, and extra-European relations.
C. P. Kindleberger
14.734
Problems in Economic History (A)
Prereq.: 14.731, 14.732, or 14.733
Units
Year: G(2)
3-0-6
Analysis of problems of industrial society, concentrating on the century after 1860 and on the American experience. Topics vary yearly and include effects of wars on welfare and growth, the nature of the long deflation of the late nineteenth century, the contrast in international relations before and after 1914, the depression of the 1930’s.
Problems of Economic Development (A)
Prereq.: 14.122, 14.452
Units
Year: G(1)
3-0-6
Analysis of problems of the rural sector in developing countries, urban-rural migration, unemployment, sectoral balance and efficiency of private resource allocation.
R. S. Eckaus
14.772
Theory of Economic Development (A)
Prereq.: 14.122, 14.452
Units
Year: G(2)
3-0-6
Analysis of problems of international trade and development; study of structure and use of planning models for development policy and use of cost benefit analysis.
J. N. Bhagwati
14.773
Optimal Growth Theory (A)
Prereq.: 14.124, 14.454
Units
Year: G(2)
3-0-9
The optimal growth problem, duality theory, development and application of the maximum principle. The behavior of optimal trajectories for a variety of situations. (Alternate years. Offered 1974-75.)
M. L. Weitzman
14.774J
Transfer and Adaptation of Technology in Developing Countries (A)
Prereq.: Permission of Instructor
Units
Year: G(2)
3-0-6
Consideration of the problems of transferring and adapting technologies originating and used in the richer countries of the world to the developing nations. Specific topics include: political, institutional, economic, and engineering issues involved in the transfer of technology.
R. S. Eckaus, F. Moavenzadeh, N. Choucri
14.782
Capitalism, Socialism and Growth (A)
Prereq.: 14.122, 14.452
Units
Year: G(1)
3-0-6
A comparative study of capitalist and socialist economies mainly from the point of view of development and growth, and with major emphasis on the economy of the Soviet Union.
Multilevel planning. Decomposition principles and their application. Planning with prices and with quantities. Materials balancing and input-output. Applications of inventory theory. The problems posed by non-convexities. (Alternate years. Not offered 1974-75.)
Ed Clark once a 'Trudeaucrat' and then a Financial Master of the Universe
During the 1973-74 academic year Dale Jorgenson served as the placement officer for 34 Harvard economics Ph.D.s (in hand or anticipated) planning to go on the market. A fifth year student offering the field of economic development with a thesis on government investment planning in Tanzania hoped to spend his first post-doc year at Harvard. Jorgensen apparently offered him a discouraging word, leading William Edmund Clark to approach John Kenneth Galbraith for help. Galbraith’s note to the department chair, James Duesenberry, is transcribed below. Galbraith could not pass up the opportunity to lend a helping hand simultaneously with a discrete back-of-the-hand at Jorgenson.
Archival artifacts from the feud involving Jorgenson and Galbraith,inter alios, in the Harvard economics department at this time were the subject of an earlier post.
Curatorial due diligence demanded that I track down whatever happened to the Harvard economics Ph.D. alumnus William Edmund Clark. It turns out that he went back to his native Canada where he entered government service. He became much more than another faceless government economist. He rose rapidly through the bureaucratic ranks and within a decade “enjoyed” sufficient notoriety to become a Trudeaucratic target of Canadian prime minister Brian Mulroney’s new government in the mid-1980s to be purged from the ranks of the civil service. From there Clark went on to an enormously successful career as a financial mover-and-shaker over the following three decades. “Red Ed” Clark also went on to make his mark in philanthropy.
The details of Clark’s truly remarkable life after his Harvard Ph.D. can be found in his Wikipedia article. John Kenneth Galbraith must have seen something that Dale Jorgenson either failed to see or didn’t want to encourage.
__________________________
Galbraith Tries an End-Run
around Jorgenson
December 20, 1973
Professor James Duesenberry
Littauer M-8
Harvard University
Dear Jim:
W. E. Clark, vitae attached, was in to see me the other day. He would like to stay on at Harvard; he has been told by Jorgenson that, in effect, there isn’t much interest in him. I find it difficult to plead we lack interest in anybody with this kind of record. I continue to suspect Mr. Jorgenson of an influence on our enterprise that is both inimical and evangelical. Couldn’t there be some corrective action without some fuss.
Yours faithfully,
John Kenneth Galbraith
JKG: efd
* * * * * * * * * * * * * * * *
William Edmund Clark Curriculum Vitae
Born: October 10, 1947
Marriage Status: Married
Children: One Son
Education:
Honors B.A., University of Toronto 1969. Economics
A.M. Harvard University 1971. Economics
Ph.D. Expected Harvard University. 1974 (Summer) Economics
Awards, Grades:
Stood first in class last three years at University of Toronto
Received Excellent Minus on written Theory for Ph.D.
Received Excellent on Orals for Ph.D.
Topics: Economic Development; Theories of Social Change
Woodrow Wilson Scholar
Thesis. Pattern of Government Controlled Investment in Tanzania
Thesis Advisors: A. O. Hirschman; A. MacEwan
Teaching Experience:
Summer Course, Acadia University, Nova Scotia 1970
Teaching Fellow, Harvard University 1971/72.
Other Work Experience:
Researcher, Center of Criminology, University of Toronto, 1966 (summer)
Researcher, Ford Foundation Project on Higher Education, University of Toronto, 1968 (summer)
Head, Research Project on Student Aid, Financed by Ontario Government and Ford Foundation, 1969 (summer)
Member, University of Toronto Tanzania Project, 1971-73
Team head, University of Toronto Tanzania Project, 1972-73
Publications:
“Access to Higher Education in Ontario” joint article with D. Cook and G. Fallis
A.O. Hirschman, Harvard University
A. MacEwan, Harvard University
D. Nowlan, Dept. of Economics, University of Toronto
D.F. Forster, Provost, University of Toronto
A. Sinclair, Chairman, Dept. of Economics, Dalhousie University, Nova Scotia
Source: John F. Kennedy Presidential Library. John Kenneth Galbraith Personal Papers. Series 5. Harvard University File, 1949-1990. Box 526. Folder “Harvard Economics Dept. of Economics: General correspondence, 1967-74 (1 of 3)”.
Image Source: “Turbulence follows former ‘Trudeaucrat”, National Post (Toronto), Aug 9, 1999.
Thanks to Milton Friedman’s filing habits, we are able to catch a glimpse into the tenure and promotion process at Harvard for the case of James S. Duesenberry in 1952. Friedman was invited to serve on the ad hoc committee to review the case for promoting Duesenberry from assistant professor to associate professor of economics with tenure in Harvard’s economics department. A typed copy of the department’s two-page recommendation submitted by the chairman Arthur Smithies, a one page c.v. for Duesenberry, and additional letters of support by Wassily Leontief and Gottfried Haberler from Milton Friedman’s file are transcribed below .
What strikes me most is just how short this written record appears when compared to the paper steeplechase of university hiring and promotion procedures of the present day.
_____________________________
HARVARD UNIVERSITY CAMBRIDGE 38, MASSACHUSETTS
Office of the Provost
April 4, 1952
Confidential
Professor Milton Friedman
University of Chicago
Chicago, Illinois
Dear Professor Friedman:
I am happy to learn from President Conant that you have kindly consented to serve on the ad hoc committee to consider an appointment in our Department of Economics. The committee will hold its meeting on Friday, April 18, at ten o’clock in the Perkins Room in Massachusetts Hall.
The position to be filled is that of Associate Professor of Economics. This rank carries permanency of tenure, and an assured progress toward a full professorship provided the man appointed lives up to expectations. For this reason we are seeking as good a young man as we can find in the age bracket under approximately forty years.
The Department of Economics has recommended Dr. James B. Duesenberry. I enclose for your scrutiny a copy of the Department’s recommendation, which, like all the material presented to the ad hoc committee, is strictly confidential. The next step in procedure is for the specially appointed ad hoc committee to advise the President and the Provost. In this connection not merely should the qualifications of Dr. Duesenberry be assessed, but he should also be compared with other men of his age group in the same field.
If there are any questions I can answer before the meeting of the committee, please do not hesitate to let me know. I am also enclosing a special travel voucher for your convenience in reporting your travel expenses in connection with the meeting of the ad hoc committee.
Sincerely yours,
[signed] Paul H. Buck
Paul H. Buck
Provost
* * * * * * * * * * * * *
COPY
HARVARD UNIVERSITY Department of Economics
Office of the Chairman
M-8 Littauer Center
Cambridge 38, Massachusetts
February 18, 1952
Provost Paul H. Buck
5 University Hall
Dear Provost Buck:
At its meeting of February 12th, the Department of Economics unanimously decided to recommend Assistant Professor James S. Duesenberry for promotion to an Associate Professorship beginning in the academic year 1952-1953.
The meeting was attended by Professors Black, Chamberlin, Dunlop, Galbraith, Hansen, Harris, Leontief, Mason, Slichter, and Smithies, all of whom voted in favor of the promotion. Professors Gerschenkron, Haberler, and Williams and Dr. Taylor who were unavoidably absent from the meeting have all indicated their approval.
I am attaching a brief curriculum vitae of Duesenberry and a list of his publications and papers.
We make this recommendation after a careful survey of all the economists in the country whom we felt might be qualified or available for an Associate Professorship. Altogether we considered about twenty young economists, both in the United States and abroad. It is our judgment that none of them could serve this faculty better than Duesenberry and very few if any of them are on a par with Duesenberry.
He is undoubtedly one of the very few outstanding young economists in the country. I know that if he were to indicate his availability he would be flooded with offers from many leading universities. To illustrate, the University of California has just lost Fellner to Yale and they have told me that they would gladly take Duesenberry as one of their two leading economists in Economic Theory.
When we had narrowed our list down, it included Baumol at Princeton, Dorfman at California, Tobin at Yale, Goodwin who is now in Cambridge, England, and Robert Rosa of the Federal Reserve Bank of New York. Rosa appealed to many of us particularly. He has had a brilliant career in the Bank which has merely been an extension of the brilliance he has shown throughout his professional career. I knew him as an undergraduate at Michigan, and he has fulfilled all the promise he showed at that time. Unfortunately, he finally decided that he was not available. Otherwise, we might have recommended Rosa’s appointment in conjunction to that of Duesenberry since we have two vacancies that we can fill.
Where Rosa would have been largely complementary to Duesenberry in view of his specific banking experience, the others on the list are more competitive with him. We were particularly impressed with Baumol who some of us know and Tobin who all of us have known for some years. Both these men are undoubtedly first class intellectually, and it would be difficult to rate them below Duesenberry. However, Duesenberry has shown a breadth of interest and a willingness to relate economics to other disciplines that the others have not yet demonstrated to the same extent. Goodwin and Dorfman are also of first-class intellectual ability, but we felt that they too were more specialized in their interests than Duesenberry.
In the last few years, Duesenberry has shown a remarkable capacity to bring together the fruits of theoretical and empirical research. His interests are now leading him in the direction of an historical study of the problem of economic development, and he has been cooperating on an experimental course on economic motivation with a member of the Social Relations Department. I believe that economies has suffered seriously in recent years from over-specialization. In particular, the theorists and the statisticians have tended to feel that the truth has been revealed only to them. History until recently has attracted far too little interest. I am confident that Duesenberry will be an important influence in reversing these tendencies.
Duesenberry made a name for himself nationally and internationally with his first book, Income, Saving, and the Theory of Consumer Behavior. His new hypothesis of “ratchet effects” has helped to avoid many of the mistakes that had previously been made in attempting to predict consumer behavior and has wide general implications for economic analysis. In this and his other work, he has already helped to rescue economies from the straight-jacket of static analysis, and I am sure he will do much more.
In view of the present needs of the Department, I wish we could have found a man who combined all Duesenberry’s other qualities with striking performance on the lecture platform. Unfortunately, that has not been possible. However, while not a striking lecturer, Duesenberry has been and will continue to be a very effective part of our undergraduate teaching. He has been a tutor in Dunster House for some years and as such has been a conspicuous success. He has also proved to be the member of the Department best equipped to teach the senior course in economic analysis for honors students. In these respects he will prove to be an important addition to the permanent staff from the point of view of undergraduate teaching.
On personal grounds, the Department looks forward very much to having Duesenberry as a permanent member. He will combine a thoroughly independent point of view with an understanding attitude towards differences of opinion with his colleagues. In general, it is the unanimous view of the Department that we could hardly make a recommendation in which we had greater confidence.
Yours Sincerely,
/s/ Arthur Smithies
Chairman
* * * * * * * * * * * * *
JAMES STEMBLE DUESENBERRY
Born July 18, 1918
B.A., University of Michigan, 1939
M.A., ibid., 1941
Ph.D., ibid., 1948
Teaching Fellow, University of Michigan, 1939-1941
U.S.A.A.F., 1942-1946.
Instructor, Massachusetts Institute of Technology, 1946.
Teaching Fellow, Harvard University, 1946-1948.
Assistant Professor, Harvard University, 1948 to present
Publications
Books:
Income, Saving, and the Theory of Consumer Behavior, Harvard University Press, 1949.
Business Cycles and Economic Development, to be published in the fall of 1952 by McGraw-Hill Company.
Articles:
“Income Consumption Relations”, Income, Employment and Public Policy, Norton, 1948.
“The Mechanics of Inflation”, Review of Economics and Statistics, May, 1950.
“Mr. Hicks and the Trade Cycle”, Quarterly Journal of Economics, September, 1950.
“The Role of Demand in the Economic Structure”, Studies in the Structure of the American Economy, in press.
“Some Aspects or the Theory of Economic Development”, Explorations in Entrepreneurial History, December 1950.
“The Leontief Input-Output System”, (ditto); to be published in a volume on Linear Programming by Paul Samuelson.
Papers Read but not Published:
“Some New Income-Consumption Relationships and Their Implications”, Econometric Society, January, 1947.
“Induction Evidence of the Propensity to Consume”, American Economic Association and the Econometric Society, December, 1947.
The Present Status of the Consumption Function” Conference on Income and Wealth, June, 1950.
“Theory of Economic Development”, Econometric Society, December, 1951.
“Needed Revisions in the Theory of Consumer Expenditures”, Econometric Society, September, 1950.
* * * * * * * * * * * * *
HARVARD UNIVERSITY GRADUATE SCHOOL OF PUBLIC ADMINISTRATION
Gottfried Haberler
Professor of Economics
325 Littauer Center
Cambridge 38, Massachusetts
March 20, 1952
Provost Paul H. Buck
Harvard University
Cambridge, Mass.
Dear Mr. Buck:
If you permit, I should like to add my personal views on the proposed appointment of James Duesenberry as Associate Professor. May I say that I know Duesenberry intimately and that I have been increasingly impressed by his work. The little book, INCOME, SAVING AND THE THEORY OF CONSUMER BEHAVIOR, which he published with the Harvard University Press, is generally regarded as one of the most important and original contributions to the widely discussed and extremely important subject of the relations of national income, saving and consumption. It has been much and favorably commented upon. Duesenberry displays the rare talent of combining theoretical analysis, statistical analysis and sociological insight in a most illuminating and successful manner. He is also a very inspiring teacher.
In recent years he has turned his attention to the also much discussed problems of economic development. The parts of his forthcoming book which I have seen display a mastery of combining different approaches in a most fruitful way. His eminence in this particular field, which in a very welcome way rounds out the field covered by members of our department, is widely recognized in the economic profession at large. He was asked to address the convention of the American Economic Association last December, and Professor Innis of Toronto, the new president of the American Economic Association, has asked him to speak again on the problem of economic development at the next annual meeting of the Association.
To sum up, in my opinion the appointment of Duesenberry will greatly strengthen the Economics Department, enhance its reputation and help attract first rate students.
Very sincerely yours,
/s/ G. Haberler
G. Haberler
* * * * * * * * * * * * *
HARVARD UNIVERSITY DEPARTMENT OF ECONOMICS
Cambridge 38, Massachusetts
March 24, 1952
Provost Paul Buck
University Hall
Harvard University
Cambridge, Massachusetts
Dear Provost Buck:
In anticipation of my appearance before the ad hoc committee, I would like to state my reasons for having vote [sic] in support of the departmental recommendation for appointment of Assistant Professor Duesenberry as associate professor. I have followed Jim’s development from the time he became, on my recommendation, an economics instructor and assistant in my undergraduate course on economic theory.
Duesenberry is one of the few outstanding young economists who established their reputation in the post war years. Baumol, Arrow, Goodwin and not more than one or two others, could be named as belonging to the same group. Among these, Duesenberry distinguished himself through his notable breadth of interest and what is in a sense more important, his remarkably productive scientific imagination. His well known contributions to the theory of consumption and the not yet published equally original work in the field of economic development, reveal a singular combination of intuitive insight, practical sense and theoretical “know-how”.
Duesenberry has already taken an important part in the work of the Harvard Economic Research Project, and I have no doubt that he will play a leading role in the development of economic and general social science research at Harvard.
Although not typically a smooth lecturer, Duesenberry is very effective in a classroom. His enthusiasm and real interest in students makes him an excellent tutor and undergraduate advisor.
If in its subsequent recommendations for permanent appointments we succeed in keeping our sights as high as in the present choice the future prospects of the Economics Department would be very bright indeed.
A meager harvest of a course artifact for Ripley’s 1907-08 round of statistics is transcribed below. But big or little, such remains the archival stuff needed for the foundation of grand historical narrative of the future (probably above my pay-grade).
HARVARD UNIVERSITY
ECONOMICS 4 Mid-year Examination, 1907-08
Criticise the following table as indicating the relative fecundity of mixed marriages:—
Fathers.
Mothers.
No. Mar.
No. Births
Children per Marriage.
1896.
1896.
1896.
1895.
1894.
United States
United States
11,551
19,892
1.7
1.8
1.8
dto.
Canada
848
1,743
2.1
2.0
1.9
dto.
Ireland
41
117
2.9
2.5
2.6
dto.
Germany
323
637
2.0
2.4
2.3
dto.
All
13,388
23,142
1.7
1.8
1.8
Why is the arithmetical rate best adapted to forecasting movements of population in America? Is it theoretically sound?
Why is the average length of life not an index of mortality?
Suppose the age and sex composition of the white and colored populations of the United States to be entirely different. Describe how their mortality rates could be reduced to a strictly comparable basis by standardization.
What has been the most significant feature of the movement of birth rates during the last thirty years? How has it been accounted for? Give relative figures.
Why should the death rate enter into the calculation of the value of an annuity? Of a tontine policy?
Why should the Supplementary Analysis of the Census rely entirely upon the “proportion of children to adults” as an index of fecundity, and omit all reference to birth rates?
What do the statistics of suicide show? State the main conclusions as set forth by Mayo-Smith.
The economics Ph.D. alumnus featured in today’s post was awarded his doctorate in 1929 by the University of Chicago. George Rogers Taylor had a long and distinguished career at Amherst College as a leading U.S. economic historian. He was the author of the history of economics at Amherst College from 1832 to 1932 transcribed for the previous post.
Taylor was an early pioneer in the interdisciplinary field of American Studies.
Fun Fact: The school was named after Francis Wayland (1796-1865), Baptist minister, economist, and president of Brown University.
1916. Graduates from Oshkosh Normal School. “He earned his way through college by waiting on tables, mowing lawns and tending furnaces. He credits the late Prof. F. R. Clow for his life-long interest in economics, Prof. M. H. Small for getting him a job as a steward in a boarding club where he received his meals and Prof. J. O. Frank, whose furnace he tended.” Source:The Oshkosh Northwestern, May 10, 1971, p. 3.
1916-17. Principal of an Blair School with ca. five teachers at Waukesha, Wisconsin. He taught seventh grade and half of the sixth grade.
The original school was established in 1847, rebuilt at new locations in 1889 and 1966 and finally closed in June 2019. Source: Milwaukee Journal Sentinel (June 4, 2019).
1917-19. Petty Officer in the U.S. Navy, aviation operations. Assigned to wireless telephony.
1919. Summer. Worked at the post office at Beaver Dam.
1919-20. Taught eighth grade for one year at Wayland Academy.
1921. Ph.B., University of Chicago. Attended two summer school sessions plus an academic year to complete degree requirements in one year. College credit was given for some of his Navy service.
Taylor had received a four year scholarship which covered his tuition for his Chicago training. There was a long-time close connection between the Wayland Academy and Chicago. The main prize at Wayland Academy’s commencement was a four year scholarship to Chicago.
1921-22. Taught at University of Iowa. Taylor was asked by Frank Knight to go there as an instructor for a year.
Taught public speaking for part of spring term at a Hammond, Indiana high school at some point during graduate school.
1941-46. Office of Price Administration and War Production Board.
1943. Adviser on price and control and rationing to the Republic of Paraguay.
1948-68. General editor of the Amherst College’s American studies program book series “Problems in American Civilization” (D.C. Heath Co.). This was a part of Amherst’s “New Curriculum” introduced in 1947. Amherst was a pioneer of the field of American Studies.
1956-58. President of the American Studies Association.
1959-62. Chairman of the Council on Research in Economic History.
1959. (with Ethel Hoover) Statement at Hearings before the Joint Economic Committee: Employment, Growth and Price Levels, 86th Congress, 1st Session, April 9, 1959.
1960. “Railroad Investment before the Civil War: Comment,” Trends in the American Economy in the Nineteenth Century, National Bureau of Economic Research, Studies in Income and Wealth, Vol. XXIV.
1961. Summer. Visiting professor at the University of Hawaii.
1962-64. President of the Economic History Association.
1964. March 12. Public lecture at the University of Delaware published in “The National Economy Before and After the Civil War,” in David T. Gilchrist and David Lewis eds., Economic Change in the Civil War Era (Greenville, Delaware, 1965).
1966. “The Beginnings of Mass Transportation in Urban America, Part I,” The Smithsonian Journal of History. Part I (Summer); Part II (Autumn).
1965-70. Senior resident scholar at the Eleutherian Mills Historical Library (Wilmington, Delaware). Taught graduate seminars in economic history at the University of Delaware.
1969. Introduction to the reprint of Introduction and Early Development of the American Cotton Textile Industry to 1860 (1863) by Samuel Batchelder. New York: Harper & Row.
1969.American Economic History before 1860 (Goldentree Bibliographies in American History, ed. Arthur S. Link) compiled by George Rogers Taylor. New York: Appleton Century Croft.
1983. Died April 11 in Northampton, Massachusetts.
Sources:
Obituary, Daily Hampshire Gazette (Northampton, Massachusetts), April 12, 1983, p. 4.
Even a superficial local history of one department can contain anecdotal nuggets of interest to historians of economics. This one for Amherst College was written by the University of Chicago trained economic historian George Rogers Taylor (Ph.D. 1929) whose Amherst faculty career spanned four decades. He tagged along when Paul Douglas took leave to teach at Amherst.
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One Hundred Years of Economics
[1832-1932]
at Amherst College by George Rogers Taylor
ALTHOUGH economics is one of the oldest of the so-called social sciences, it may come as a surprise to some to learn that in one form or another this subject has been taught at Amherst probably since the founding of the college. At first no separate courses were given in economics, but it was a recognized part of the more general subject then known as moral philosophy. It will be remembered in this connection that Adam Smith himself was professor of moral philosophy at the University of Glasgow and came to his interest in economics from that more general subject. As early as 1827-28 “political economy” — now known as “economics” — was listed as required for seniors, but it is not known how much work was done or what member of the faculty directed it. Quite possibly Pres. Heman Humphrey, who held the chair of professor of mental and moral philosophy, may have done some regular teaching in economics.
One hundred years ago, during the school year 1832-33, political economy became a definitely recognized part of the curriculum, and Hon. Samuel C. Allen [a trustee of the Amherst College Corporation] was appointed to the faculty as lecturer in political economy [First term of Senior Studies “Say’s Political Economy” (p. 14); “ Lectures on Political Economy and Legislation will be delivered by the Hon. Samuel C. Allen” (p. 15)]. It is reported that he volunteered his services for this purpose and received by way of compensation “the thanks of the trustees.” He lectured only during this one year. Though political economy continued to be taught, there probably were no further formal lectures in the subject until 1835. In that year Hon. William B. Calhoun of Springfield [A.M. “Lecturer on Political Economy”, Nov 1836 Catalog (p. 5)], one of the trustees, was appointed lecturer in political economy [Third term, Senior year. Nov 1836 Catalog (p. 16)]. He continued to hold that position until 1849 [sic, 1835-1850 according to Amherst records]. Then, for a little more than a decade, there was no faculty representative definitely in this field; but the course continued as part of the curriculum and, at least in some years, regular lectures were given. Apparently this teaching was allotted to the professor of intellectual and moral philosophy.
One other lecturer in political economy was appointed before 1876. Amasa Walker [Note: Father (!) of Francis Amasa Walker] held that position from1860 to 1869. Like Allen and Calhoun, Walker came to his teaching with the background of one interested in public affairs. In addition to holding state offices, all three men were members of the United States House of Representatives. Both Calhoun and Walker carried on their work at Amherst College while serving in Congress. All of these early teachers of political economy at Amherst were unquestionably able, public spirited, and deeply religious men.
The economics taught in these early lectures followed in general the lines laid down by the English classical school. The popular translation of Say’s “Political Economy” was used as a textbook until 1838, when it was replaced by Wayland’s “Political Economy” — an American restatement and simplification of the classical doctrine. But it must not be concluded that these men were dry-as-dust expositors of the “dismal science.” Nor were they among those of the period who have been so often accused of using classical economics primarily as a device for defending the status quo. All were men of liberal tendencies, much interested in the progressive movements of their day. Allen, who started out as a Congregational minister, afterwards becoming a Unitarian, was a Democrat and an ardent champion of free trade. William B. Calhoun is described as one who dealt with social and political problems more in the spirit of a philosopher than a politician. He left former political allegiances to become a strong anti-slavery Whig and was a leader in the temperance movement of the time. Amasa Walker also was an active leader in the reform movements of his day. He gave generously of his time and ability to the temperance, anti-slavery, and peace movements.
Of the three, Walker is the only one who was primarily an economist. He was generally recognized in his day as an authority in finance and has left writings, particularly in the field of currency and finance, which may still be read with profit by the economist and the historian. In 1866 he published his chief work, “The Science of Wealth.” His chapters on money and currency are particularly able. He was much in advance of his time in the use of statistics and graphical methods. Even in the more theoretical parts of the subject, Walker was vigorous and questioning. American conditions with which he was acquainted, not only as a business man but also as a legislator, led him to question Malthus’s famous law of population and to differ with Ricardo on certain important points of rent theory.
The present phase of economics at Amherst College began with the appointment of Anson D. Morse as instructor in political economy in 1876. The subject became now much more than an appendage to moral philosophy and the lectures were no longer given by ministers or practical men of affairs. From now on the teachers were professional students of social science, trained as such, and among those who were called to the chair of professor of economics were men who are numbered among the ablest in the American field.
Professor Morse [Anson D. Morse Papers at the Amherst College Archives] began his many years of fruitful teaching at Amherst in 1876 as an instructor of political economy. But his main interest was history, and before many years he had shifted completely over to that department. It is history, therefore, rather than economics, which has primary claim upon this man who is remembered not only as a scholar but as one of Amherst’s most stimulating teachers.
From 1885 down to the World War, three outstanding teachers left their impress on economics, not only by their teaching at Amherst College but also through their writings. Two of these, John Bates Clark [see also; also this post] and his son, John Maurice Clark, have made major contributions to the economic thought of the time. The elder Clark is known for contributions to economic theory that are regarded by many as the most significant which America has produced. His son has taken his place as one of the ablest and most original of American economic writers of today. The third, James W. Crook, [see also] was primarily a teacher, beloved by two generations of Amherst students.
In more recent years, the professors of economics at Amherst have continued to be men of outstanding ability and national prominence. Among those who were in the department long enough to leave a definite mark on the life of the College must be listed Walton Hale Hamilton, Walter W. Stewart, Paul Howard Douglas, and Richard Stockton Meriam.
Until 1880 only one course was given in economics. This was apparently comparable to the principles or introductory course of more recent years. It is interesting to note that the first course to be added (1880) was one in the history of socialism. As time went on other courses appeared and disappeared, but usually they were substantially in one of the four fields now covered by advanced courses — finance, labor, economic history, and advanced theory.
It will be noted that two tendencies in the teaching of college economics which have been increasingly prominent in the United States during the last twenty years have been completely avoided at Amherst. The first is that toward the multiplication of courses. In fact, Amherst has gone to the extreme in the other direction. A study¹ of a large number of American colleges made in 1928 brought out the fact that only three colleges offered fewer courses in economics than Amherst, and the average number of subjects per instructor was smaller at Amherst than at any other college.
In the second place, the trend toward the introduction of business subjects has not affected the Amherst course of study. Economics, as taught here for one hundred years, has been given from the cultural and not from the professional point of view. In fact, the early courses in moral philosophy, which included at least some economics, were in so far as they were especially designed for students preparing for the ministry, possibly more professional than are the present courses in economics which are designed for the student who is to enter any walk of life.
The first hundred years of economics at Amherst College has witnessed many changes. A distinguished line of teachers has come and gone. The subject matter of the courses has been somewhat altered and expanded. In the early days economics was a compulsory course during part of the senior year. As time went on the department was enlarged but study in the department was made optional. Since 1927 the introductory course has been open to sophomores. The advanced student has now four courses in the department from which he may choose: economic history of the United States, labor problems, theory of credit, and development of economic thought, and additional individual work is offered for those taking honors in economics. But though many changes have taken place, the purpose of the work has remained essentially what it has always been, to fit the student to take his place in the world as a cultured man and a good citizen.
1895–99. Assistant Professor of Political Economy, Amherst College.
1899-1907. Associate Professor of Political Economy, Amherst College.
1907-27. Professor of Political Economy, Amherst College.
1912. M.A., Amherst College.
1927—. Professor Emeritus, Amherst College.
1927-33. Professor of Public Speaking at Northeastern University.
1933. Died November 22 in Springfield, Massachusetts.
Sources: Annual yearbooks of Amherst College (The Olio), Crook’s Boston Globe obituary (October 23, 1933)
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Amherst College
Economics Course Offerings 1901-02 Professor Crook
The numbers 1, 2, 3, 4 denote, not the four classes, but the successive years in which courses are offered. The letters a, b, c denote the first, second, and third terms. The letters aa, bb, cc indicate courses parallel with courses a, b, c, respectively. [p. 51]
(1 b) Advanced work in economic theory. Assigned readings in Smith, Ricardo, and Mill, with especial attention to Marshall’s Principles of Economics and Clark’s Distribution of Wealth. (1 a requisite.)
The practical monetary problems of the United States are considered, and the systems of banking practised in England, France, Germany, and the United States are compared.
(1 c) Public finance; taxation; public expenditures; public debts; financial administration. Adams’s Science of Finance. (1 a requisite.)
Image Source: PBS, American Masters. S38 EP3: 
