Category: Chicago

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Chicago Economists

Chicago. Milton Friedman from Cambridge to T.W. Schultz. 29 Mar 1954

About a week ago I posted Milton Friedman’s letter from Cambridge, England to T. W. Schultz dated 28 October 1953. Today we have the next carbon copy of a letter to Schultz from Cambridge in the Milton Friedman papers at the Hoover Institution in which Friedman discusses a range of issues from a one-year appointment in mathematical economics at Chicago, the Cowles’ Directorship appointment, and postdoctoral fellowships. The letter ends with a laundry-list of miscellaneous comments from Arthur Burns’ Economic Report to the President through the reception of McCarthy news in England. Friedman’s candid assessments of many of his fellow-economists make this letter particularly interesting.  More to come!

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

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Milton Friedman to T.W. Schultz
29 March 1954

15 Latham Road
Cambridge, England
March 29, 1954

 

Dear Ted:

Of the people you list as possible visiting professors while Koopmans is away, Solow of M.I.T. is the one who offhand appeals to me the most. I have almost no doubt about his absolute competence: I read his doctoral dissertation at an early stage and saw something of him last summer and the preceding summer when he was spending some time at Hanover in connection with one or another of Bill Madow’s projects. He has a seminal mind and analytical ability of a very high order. My only questions would be the other that you raise, whether he is broadly enough interested in economics. And here I am inclined to answer with an uncertain yes, relying partly on the fact that he is flexible and capable of being induced. I do not know Dorfman of California either personally or through his writings. My question about him is that I believe that we would do best if we could use this opportunity in general to bring in someone with a rather different point of view and who will provide a broadening of the kind of thing done under the heading of mathematical economics, and my impression is that Dorfman is very much in the same line as Koopmans – but here too, I don’t have much confidence in my knowledge. As you know, I think very highly of both Modigliani and Christ, but as of the moment for this particular spot, would prefer Solow, partly on grounds of greater differentiation of product.

One rather harebrained possibility that has occurred to me outside your list is Maurice Allais, the French mathematical economist who is Professor at École des Mines. Allais is a crackpot genius in many respects. He came out of engineering and is largely self taught, which means he holds the erroneous views he has discovered for himself as strongly as the correct ones. I have always said that if he had, at a formative age, had one year of really good graduate education in economics he might have become one of the really great names. At the same time, Allais is an exceedingly active and stimulating person who works in mathematical economics of a rather different kind than we have been accustomed to. I think it would be a good thing to have him around for a year – both for us and him – though I am most uncertain that it would be for a longer period. I don’t have any basis for knowing whether Allais would be interested.

I have tried to think over the other European mathematical economists to see if they offer other possibilities. There are others in France: Guilbaud [Georges-Théodule Guilbaud (1912-2008)], Boiteux [Marcel Boiteux (1922-)] (I don’t have that spelled right), but none seem to me as good as Allais for our purposes. There are Frisch and Haavelmo in Norway, Wold in Sweden; of these, Haavelmo would be the best. I find it hard to think of anybody in England who meets this particular bill, and would be at all conceivable. Dick Stone? Has just been over and is not primarily mathematical but might be very good indeed in some ways. Is certainly econometric minded and fairly broadly so. R.G.D. Allen? Has done almost nothing in math. econ. for a long time.*

*[handwritten footnote, incomplete on left side presumably because carbon paper folded on the corner:   “…real possibility here is a young fellow at the London School, A. W. Phillips…invented the “machine” Lerner has been peddling. He came to econ. out of ….good indeed. He has an important paper in the mathematics of stabilization (over) policies, scheduled to appear(?) in Econ. Journal shortly.”]

Getting back home, the names that occur to me have, I am sure, also occurred to you. Is Kenneth Arrow unavailable for a year’s arrangement? What about Vickrey? I don’t believe that in any absolute sense I would rate Vickrey above Christ, say, but for us he has the advantage of bringing a different background and approach.

The above is all written in the context of a definite one-year arrangement in the field of mathematical economics. I realize, of course, that this may turn out to be an undesirable limitation. This is certainly an opportunity to try someone whom we might be interested in permanently; and it may be possible to make temporary arrangements for math. econ. for the coming year – via DuBrul, Marschak, etc. The difficulty is that once I leave this limited field, the remainder is so broad that I hardly know where to turn. For myself, I believe we might well use this to bring someone in in money, if that possibility existed. If it did, I should want strongly to press on you Harry Johnson, here at Cambridge, but originally a Canadian educated at the University of Toronto, who is the one new person I have come to know here who has really impressed me.

One other person from the US left out of the above list but perhaps eligible even within the narrower limitations is William Baumol. Oughtn’t he be considered?

Within the narrower limitations, my own listing would, at the moment, be: Allais, Solow, Baumol, Arrow, Vickrey, Phillips. I would hasten to add that my listing of Arrow fourth is entirely consistent with my believing him the best of the lot in absolute competence, and the one who would still go to the top of this list for a permanent post.

I turn to the other possibility you raise in your letter, a permanent post a la the Tobin one. I am somewhat puzzled how to interpret the change of view, you suggest, I assume that the person would be expected to take over the directorship of Cowles. If this is so, it seems to me highly unfortunate to link it with a permanent post in the department. Obviously, the best of all worlds would be if there were someone we definitely wanted as a permanent member of the department who also happened to be interested in the Cowles area and was willing to direct, or better interested in directing, Cowles. In lieu of this happy accident, I would myself like to see the two issues kept as distinct as possible; to have the Cowles people name a director, with the aid and advice but not necessarily the consent, of the department; have the department offer him cooperation, opportunity to teach, etc., but without having him a full-fledged permanent member. I hope you will pardon these obiter dicta. I realize that this is a topic you have doubtless discussed ad nauseam; what is even more important, if after such discussion, you feel differently, I would predict that you would succeed in persuading me to your view; which is why I leave it with these dicta and without indicating the arguments – you can provide them better than I.

The issue strikes me particularly forcefully because I do feel that in terms of the needs of the department, our main need is not for someone else mainly in the Cowles area; it is for someone to replace either Mints in money, or me in orthodox theory, if I slide over to take Mints’ role.

For Cowles’ sake as well as our own, there might be much to be said for having the directorship be the primary post for whoever comes. It seems to me bad for Cowles to have that post viewed as either a sideshow or a stepping stone. For directorship of Cowles, some names that occur are: Herbert Simon; Dorothy Brady; with more doubt Modigliani. One possibility much farther off the beaten track is Warren Nutter, who has, I gathered, been a phenomenal administrative success in Wash. at Central Intelligence Agency; yet is an economist. Would Charlie Hitch, who has been running Rand’s economic division be completely out?

[Handwritten note: “You know, Gregg Lewis might be better than any of these if he would do it!]

If the post is to be viewed as primarily a professorship in the department, with Cowles directorship as a sideline, I have great difficulty in making any suggestions: I would not, in particular, be enthusiastic about any of those mentioned in the preceding paragraph. Arrow, yes, but he is apparently out. Simon Kuznets, yes, but he would be likely to make Cowles into something altogether different that it is. I feel literally stuck in trying to think of acceptable candidates. Perhaps I can be more useful in reacting to other suggestions.

Let me combine with this some comments on your March 15 letter, which I should have answered long since.

On the post-doctoral fellowship, I feel less bearish than you, primarily, I suppose because I am inclined to lay a good deal of emphasis on the intangible benefits from having a widespread group of people who have had a year at Chicago. It seems to me that a post-doctoral fellowship is more likely to do this than a staff appointment, both because it is likely to bring in a wider range of people to apply and because it is rather more likely to have a one or two year limit and so a more rapid turnover. What has disappointed me most is the limited number of people among whom we have been forced to choose. Why is it that we don’t get more applications? Is it because we do treat it now like a staff appointment? Do we advertise it as widely as we might and stimulate a considerable number of applicants? Or is it simply because the great increase in number of post-doctoral fellowships available (and decrease in quality of people going in for economics?) has lowered the demand for any one fellowship? I find it hard to believe that making it into a staff appointment would help much in providing more adequate review and appraisal – this is I believe a result of the limitations of time on all of us – but it might give it greater prestige and make it more valuable to the recipient in this way, though, it would cost him tax and limit freedom.

I believe that part of the problem you raise about the postdoctoral fellowship has little to do with it per se but is a general problem about the department. Is our own work subject to as much discussion and advice from our colleagues as each of us would like? The answer seems to me clearly no. The trouble is – and I am afraid it is to some extent unavoidable and common at other places – that we have so many other duties and tasks to perform that being an intellectual community engaged in cross-stimulation perforce takes a back seat. This disease is I think one that grows as the square of the professional age. From this point of view, I think that the more junior people around the better in many ways and I think this one of the real virtues of the development of research projects that will enable us to keep more beginners around.

On the whole, I continue to think that the fellowship idea is sound, in the sense that we ought to have a number of people around who have no assigned duties. I would defend the Mishan result in these terms. I think he was a most useful intellectual stimulant and irritant to have around even if his own output was not too striking. The virtue of the fellowship arrangement is that it enables you to shape the hole to the peg. I cannot of course judge about Prais. But I am surprised by your adverse comments on Dewey’s use of it; I would have thought his one of the clearly most successful post-doctoral fellowships so far.

As you have doubtless heard, Muth has decided to go to Cowles. I am sorry that he has. I think he is good. I am somewhat troubled about the general problem of recruiting for the Workshop at a distance. In addition to Muth, I had heard from Pesek, whom I encouraged but left the matter open because he would rather have a fellowship that he applied for that would pay his travelling expenses to Washington. My general feeling is that it would be a mistake to take anyone just because I am not on the spot, that it would be far better to start fairly slowly, and let the thing build up, adding people as they turn up next year. Any comments or suggestions would be greatly appreciated.

I am delighted to hear about Fred’s ford project. I had a wire from Willits recently re Harberger and I assume it was in connection with his proposed project. Al Rees will be a splendid editor, I feel, and it is excellent to have him entirely in the department. I hardly know what to think of Morton Grodzins as Dean. I assume that his appointment measn that he was regarded as a successful administrator at the Press. Grodzins has great drive and energy, is clearly bright and intelligent, but whether he has the judgment either of men or of directions of development that is required, and the ability to raise money that Tyler displayed, is something I have less confidence in. Who is taking over the Press?

I enjoyed your comments on both Arthur Burns and McCarthy. With respect to the first, I thought the economic report extraordinarily good, both in its analysis of the immediate situation and in its discussion of the general considerations that should guide policy. It showed courage, too, I think in its willingness to say nasty things about farm supports and minimum wages to mention two. My views about the recession are indicated by the title of a lecture I am scheduled to give in Stockholm towards the end of April: “Why the American Economy is Depression-proof”. After all, there is no reason why Colin Clark should be the only economist sticking his neck out. It continues to seem to me that the danger to be worried about is over-reacting to this recession and in the process producing a subsequent inflationary spurt. Arthur seems to me to be showing real courage in holding out against action. To do something would surely be the easy and in the short run politically popular course.

McCarthyism has of course been attracting enormous attention here. Indeed, for long it has crowded almost all other American news into the background with the result that it has given a thoroughly distorted view of America to newspaper readers. I enclose a clipping in this connection which you may find amusing. it is not a bad summary, though I trust I put in more qualifications.

We have gotten an opportunity to go to Spain via an invitation to lecture at Madrid (Earl’s doing, I suspect), so Rose and I are leaving next week for a week there. Shortly after our return we go to Sweden and Denmark for a couple of weeks. We are very much excited by the prospects. Best regards to all.

Yours

[signed]
Milton

 

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

 

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

Categories
Chicago Economists

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

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

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

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15 Latham Road
Cambridge, England
October 28, 1953

Dear Ted [Theodore W. Schultz]:

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

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

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

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

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

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

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

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

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

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

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

Our very best to everyone.

 

Yours,

[signed]

Milton

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

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

Categories
Chicago Economists Funny Business

Chicago. HMS Pinafore parody about Milton Friedman

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

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

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

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

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

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

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

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Version 1:

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

 

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

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

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

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

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

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

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Version 2:

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

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

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

[4 beats]

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

Chorus: (Oh, such ….)

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

Chorus: (This sophistry ….)

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

Chorus: (They never….)

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

Chorus: (This ivory ….

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

Chorus: (And you …)

 

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

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

 

 

Categories
Chicago Economists Yale

Chicago. James Tobin Autobiographical Letter from Faculty Meeting, 1950

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

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

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

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

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

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TO: Professor T. W. Schultz

DATE: January 27, 1950

FROM: J. Marschak

 

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

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

Sincerely yours,

Jacob Marschak

 

 

JAMES TOBIN. (Letter of April 2, 1949)

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

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

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

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

 

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

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

Categories
Chicago Economists Harvard

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

Freedom of Information Act Documents.

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

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

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

American Debut

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

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

 

Source: Anti-Defamation League website.

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

 

 

 

Categories
Chicago Economists

Chicago. James Buchanan’s Dissertation Outline, 1947

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

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

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

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

[…]

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

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Dissertation Outline, James M. Buchanan, October 1947

J. M. Buchanan

EQUITY CONSIDERATIONS IN INTERGOVERNMENTAL FISCAL ADJUSTMENT

I. The Problem —

A. The federal political structure

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

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

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

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

B. The national economy —

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

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

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

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

II.            A Theoretical Solution –

A. What is fiscal equity in such a structure?

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

B. Application of the concept —

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

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

C. Arithmetical Examples –

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

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

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

B. Assumptions and abstractions –

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

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

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

D.            Expenditure pattern of individuals considered.

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

2. Distribution of expenditure at various income levels.

3. Property holdings at different income levels.

E. Determination of tax burdens of individuals considered.

1. Examination of tax structures of states in question.

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

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

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

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

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

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

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

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

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

IV.           Existing and proposed attempts at solution.

A. Vertical Integration

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

B. Horizontal Integration and Coordination –

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

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

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

2. Proposals for extension of the system –

a.            Further use of the conditional grant

(1)  Merits of the conditional grant

(2)  Drawbacks

(a)  Effects on budgetary independence of subordinate units.

(b) Central direction and interference.

b.            The concept of a “minimum standard”

(1)  Idea of the “national interest”

(2)  Attempts at defining “minimum standards”

(3)  Violation of equity criteria

(4)  Federal assumption of a function.

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

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

A. The practicability of direct application.

1. Difficulty of measurement

2. Political and administrative barriers.

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

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

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

3. Broadening of purpose for which grants are made.

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

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

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

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

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

A. Theoretical Objections

1. The central government as the adjusting unit.

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

3. The nation as the economic unit.

B. Administrative Objections.

1. Violation of principle of fiscal responsibility.

VII.          Conclusion.

____________________________

 

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

I. Students’ Business

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

James M. Buchanan

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

Henry Woldon Hewetson

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

[Inserted:

Harriett D. Hudson.

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

Norman Maurice Kaplan

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

Raymond H. McEvoy

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

Wallace E. Ogg

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

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

Raymond H. McEvoy

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

Peter Senn

Subject: Federal subsidization of the Banks
Field:
Committee:

D. Petitions

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

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

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

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

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

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

[John K. Lewis]

II. Encyclopedia Britannica Economic Articles

III. Language requirements for Foreign students.

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

V. New Business

 

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

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

 

Categories
Berkeley Chicago Columbia Economists

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

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

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

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

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

[…]

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

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

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

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

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

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

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

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

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

* * * *

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

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

* * * *

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

* * * *

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

* * * *

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

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

 

[…]

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

 

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

Image Source: Foundation for the Study of Cycles.

Categories
Chicago Economists

Chicago. 25th anniversary of Dept of Political Economy, 1916

In 1916 the department of political economy of the University of Chicago celebrated its 25th anniversary (coinciding with that of the university) with a privately printed pamphlet in which were listed the names of the 38 members of the instructional staff, 12 assistants, 98 fellows, 637 graduate students and 31 Ph.D.’s of its first quarter century. Note: some names are listed in more than a single category. Appended to the end of the pamphlet is a statistical record of instructional staff, graduate students and political economy course registrations annually for the period.

___________________________________

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

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TWENTY-FIVE YEARS OF THE
DEPARTMENT OF POLITICAL ECONOMY

DEPARTMENT
OF
POLITICAL ECONOMY.
1892-3.

OFFICERS OF INSTRUCTION:

J. LAURENCE LAUGHLIN, Ph. D.,

Head-Professor of Political Economy.

ADOLPH C. MILLER, A. M.,

Associate-Professor of Political Economy.

WILLIAM CALDWELL, A. M.,

Tutor in Political Economy.

___________________________________

 

TWENTY-FIVE YEARS
OF THE
DEPARTMENT OF POLITICAL ECONOMY
UNIVERSITY OF CHICAGO

 

JAMES LAURENCE LAUGHLIN
Professor and Head of the Department of Political Economy
1892-1916

 

CHICAGO
PRIVATELY PRINTED
MCMXVI

___________________________________

 

JAMES LAURENCE LAUGHLIN
Professor and Head of the Department of Political Economy, 1892-1916.

* * *

Edith Abbott

Special Lecturer in Political Economy, 1909-10.

William George Stewart Adams

Lecturer on Finance and Colonial Policy, 1901-2.

Trevor Arnett

Lecturer in Accounting, 1909-13.

John Graham Brooks

University Extension Lecturer in Political Economy, 1893-97.

William Caldwell

Instructor in Political Economy, 1892-94.

John Bennet Canning

Special Assistant in Political Economy, 1914; Assistant, 1914-15; Instructor, 1915-

John Maurice Clark

Associate Professor in Political Economy, 1915-

Carlos Carleton Closson

Instructor in Political Economy, 1895-96.

John Cummings

Reader in Political Economy, 1893-94; Assistant Professor, 1903-10.

Herbert Joseph Davenport

Instructor in Political Economy, 1902-4; Assistant Professor, 1904-7; Associate Professor, 1907-8.

Ernest Ritson Dewsnup

Professorial Lecturer on Railways and Curator of the Museum of Commerce, 1904-7.

Garrett Droppers

Professorial Lecturer, 1906-7.

Carson Samuel Duncan

Instructor in Commercial Organization, 1915-

Jay Dunne

Assistant in Accounting, 1913-14; Instructor, 1914-

James Alfred Field

Instructor in Political Economy, 1908-10; Assistant Professor, 1910-13; Associate Professor, 1913-

Worthington Chauncey Ford

Lecturer on Statistics, 1898-1901.

Frederic Benjamin Garver

Assistant in Political Economy, 1911-13; Instructor, 1913-14.

Elgin Ralston Lovell Gould

Professor of Statistics, 1895-96.

Stuart McCune Hamilton

Instructor in Political Economy, 1914-16.

Walton Hale Hamilton

Assistant Professor of Political Economy, 1913-15.

Henry Rand Hatfield

Instructor in Political Economy, 1898-1902; Assistant Professor, 1902-4.

Frank Randal Hathaway

Reader in Statistics, 1892-93.

William Hill

Associate in Political Economy, 1893-94; Instructor, 1894-97; Assistant Professor, 1897-1908; Associate Professor, 1908-12.

Isaac A. Hourwich

Docent in Statistics, 1892-94.

Robert Franklin Hoxie

Instructor in Political Economy, 1906-8; Assistant Professor, 1908-12; Associate Professor, 1912-

Alvin Saunders Johnson

Associate Professor of Political Economy, 1910-11.

John Koren

Professorial Lecturer on Statistics (Political Economy and Sociology), 1909-10.

Leon Carroll Marshall

Assistant Professor of Political Economy, 1907-8; Associate Professor, 1908-11; Professor of Political Economy, 1911-

Hugo Richard Meyer

Assistant Professor of Political Economy, 1903-5.

Adolph Caspar Miller

Associate Professor of Political Economy, 1892-93; Professor of Finance, 1893-1902.

Wesley Clair Mitchell

Assistant in Political Economy, 1900-1; Instructor, 1901-2.

Robert Morris

Instructor in Political Economy, 1904-7.

Harold Glenn Moulton

Assistant in Political Economy, 1910-11 ; Instructor, 1911-14; Assistant Professor, 1914-

Frederic William Sanders

Lecturer in Statistics, 1896-97.

Frederick Myerle Simons

Assistant in Industrial Organization, 1913- 15; Instructor, 1915-

Thorstein B. Veblen

Reader in Political Economy, 1893-94; Associate, 1894-96; Instructor, 1896-1900; Assistant Professor, 1900-06.

Chester Whitney Wright

Instructor in Political Economy, 1907-10; Assistant Professor, 1910-13; Associate Professor, 1913-

*   *   *

[Assistants]

Clarence Elmore Bonnett

Assistant in Political Economy, 1910-11.

Ezekiel Henry Downey

Assistant in Political Economy, 1909-11.

John Franklin Ebersole

Assistant in Political Economy, 1909-10.

Edith Scott Gray

Assistant in Political Economy, 1915-

Homer Hoyt

Assistant in Political Economy, 1915-

Edgar Hutchinson Johnson

Assistant in Political Economy, 1909-10.

John Curtis Kennedy

Assistant in Political Economy, 1908-11.

Robert Russ Kern

Assistant in Political Economy, 1908-9.

Hazel Kyrk

Assistant in Political Economy, 1913-14.

Duncan Alexander MacGibbon

Assistant in Political Economy, 1912-13.

Ernest Minor Patterson

Assistant in Political Economy, 1910-11.

Leona Margaret Powell

Assistant in Political Economy, 1915-

___________________________________

 

FELLOWS

Edith Abbott (1903-05)

William Harvey Allen (1897-98)

Eugene Charles deAndrassy (1913-14)

Charles Criswell Arbuthnot (1901-03)

Leon Ardzrooni (1910-13)

Trevor Arnett (1899-1900)

Edward Martin Arnos (1912-13)

Otho Clifford Ault (1913-14)

Edward Donald Baker (1912-14)

Sturgeon Bell (1906-07)

Clarence Elmore Bonnett (1912-13)

Donald Elliott Bridgman (1905-07)

Howard Gray Brownson (1906-07)

Francis Lowden Burnet (1912-13)

George Chambers Calvert (1894-95)

John Cummings (1893-94)

Rajani Kanta Das (1914-16)

Herbert Joseph Davenport (1897-98)

Katharine Bement Davis (1897-98; 1899-1900)

William John Alexander Donald (1911-12)

James Alister Donnell (1902-03)

Ezekiel Henry Downey (1908-09)

Ephraim Edward Erickson (1911-12)

Katharine Conway Felton (1895-96)

Albert Lawrence Fish (1899-1900)

Ralph Evans Freeman (1915-16)

Hamline Herbert Freer (1892-93)

Frederic Benjamin Garver (1910-11)

Marshall Allen Granger (1915-)

Homer Ewart Gregory (1915-)

Gudmundur Grimson (1905-06)

Willard Neal Grubb (1908-09)

Charles Kelly Guild (1911-12)

William Buck Guthrie (1900-01)

William Fletcher Harding (1894-95)

Sarah McLean Hardy (1893-95)

Henry Rand Hatfield (1897-98)

Chauncey Edward Hope (1912-13)

Albert Lafayette Hopkins (1905-06)

John Lamar Hopkins (1899-1900)

Earl Dean Howard (1903-05)

Robert Franklin Hoxie (1893-95; 1902-03)

Homer Hoyt (1913-15)

Howard Archibald Hubbard (1909-12)

Walter Huth (1912-13)

John Curtis Kennedy (1907-09)

Robert Russ Kern (1907-08)

Benjamin Walter King (1913-14)

William Lyon Mackenzie King (1896-97)

Delos Oscar Kinsman (1898-99)

Hazel Kyrk (1912-13)

Manuel Lippitt Larkin (1911-12; 1913-14)

William Jett I.auck (1903-05)

Ferris Finley Laune (1915-)

Stephen Butler Leacock (1900-02)

Mary Margaret Lee (1907-08)

Svanto Godfrey Lindholm (1900-02)

Simon James McLean (1896-97)

James Dysart Magee (1909-10)

Basil Maxwell Manly (1909-10)

Howard Sherwood Meade (1897-98)

Albert Newton Merritt (1905-06)

Frieda Segelke Miller (1912-15)

John Wilson Million (1892-93; 1894-95)

Harry Alvin Millis (1898-99)

Wesley Clair Mitchell (1896-99)

James Ernest Moffat (1915-)

Harold Glenn Moulton (1909-11)

Walter Dudley Nash (1901-02)

Robert Samuel Padan (1900-01)

Eugene Bryan Patton (1905-08)

Clarence J. Primm (1908-10)

Yetta Scheftel (1913-14)

D. R. Scott (1911-12)

Frederick Snyder Seegmiller (1909-10)

George Cushing Sikes (1893-94)

Selden Frazer Smyser (1901-02)

Lewis Carlyle Sorrell (1915-)

George Asbury Stephens (1908-09)

Worthy Putnam Sterns (1897-1900)

Henry Waldgrave Stuart (1894-96)

Laurence Wardell Swan (1914-15)

William Walker Swanson (1905-08)

Archibald Wellington Taylor (1909-12)

John Giffin Thompson (1903-04)

George Gerard Tunell (1894-97)

Helen Honor Tunnicliff (1893-94)

Victor Nelson Valgren (1911-12)

Cleanthes Aristides Vassardakis (1911-12)

Thorstein B. Veblen (1892-93)

Merle Bowman Waltz (1895-96)

Samuel Roy Weaver (1911-12)

Victor J. West (1908-09)

Henry Kirke White (1893-94)

Murray Shipley Wildman (1901-04)

Henry Parker Willis (1895-98)

Ambrose Pare Winston (1893-94; 1896-97)

Anna Pritchett Youngman (1905-06; 1907-08)

___________________________________

GRADUATE STUDENTS

Abbott, Edith

Agate, William Richard

Akers, Dwight La Brae

Allen, William Harvey

Alvord, Clarence Walworth

Andrassy, Eugene Charles de

Apel, Paul Herman

Appell, Carl John

Apps, Elizabeth

Arbuthnot, Charles Criswell

Ardzrooni, Leon

Arnett, Trevor

Arnos, Edward Martin

Atcherson, Lucile

Ault, Otho Clifford

Bacon, Margaret Gray

Baker, Edward Donald

Balch, Emily Greene

Baldwin, James Fosdick

Ball, Ernest Everett

Barden, Carrie

Barnes, Jasper Converse

Barnes, Mabel Bonnell

Baron, Albert Heyen Nachman

Barrett, Don Carlos

Barrett, Roscoe Conkling

Bassett, Wilbur Wheeler

Bealin, Nella Ellery

Beall, Cornelia Morgan

Belknap, William Burke, Jr.

Bell, Hugh Samuel

Bell, James Warsau

Bell, Spurgeon

Bender, Christian Edward

Bengtson, Caroline

Benson, Madison Hawthorne

Berghoff, Lewis Windthorst

Bernstein, Nathan

Beyle, Herman Carey

Bischoff, Henry J.

Blachly, Clarence Day

Black, John Donald

Blankenship, Harry Alden

Bliss, George Morgan

Blotkin, Frank Ernest

Board, Willis Marvin

Bolinger, Walter Allen

Bond, William Scott

Bonnett, Clarence Elmore

Borden, Edwin Howard

Bosworth, William Baeder

Bournival, Phillippe

Bouroff, Basil Andreevitch

Boyce, Warren Scott

Boyd, Carl Evans

Boyd, Charles Samuel

Boyd, William Edington

Bozarth, Maud

Bradenburg, Samuel Jacob

Bradley, Frederick Oliver

Bramhall, Frederick Dennison

Brandenberger, William Samuel

Breckinridge, Roeliff Morton

Breckinridge, Sophonisba Preston

Bridgman, Donald Elliott

Bridgman, Isaac Martin

Briggs, Claude Porter

Brister, John Willard

Bristol, William Frank

Bristow, Oliver Martin

Brooks, Samuel Palmer

Brown, Fanny Chamberlain

Brown, Samuel Emmons

Brownson, Howard Gray

Bryant, William Cullen

Buchanan, Daniel Houston

Buchanan, James Shannon

Buechel, Fred A.

Bulkley, Herman Egbert

Bullock, Theodore Tunnison

Burnet, Francis Lowden

Burnham, Smith

Bushnell, Charles Joseph

Butts, Alfred Benjamin

Byers, Charles Howard

Byram, Perry Magnus

Cable, Joseph Ray

Calhoun, Wilbur Pere

Calvert, George Chambers

Cammack, Ira Insco

Canning, John Bennet

Capitsini, George Peter

Carlton, Frank Tracy

Carmack, James Abner

Carroll, John Murray

Carroll, Mollie Ray

Cartwright, Lawrence Randolph

Cassells, Gladys May

Catterall, Ralph Charles Henry

Chamberlain, Elizabeth Leland

Chapin, Lillian

Chen, Huan Chang

Chen, Po

Cheng, Pekao Tienton

Cheu, Beihan H.

Church, Clarence Cecil

Church, James Duncan

Clark, Fred Emerson

Clark, Henry Tefft

Clarkson, Matthew Alexander

Cleveland, Frederick Albert

Clifford, Wesley Nathaniel

Cole, Warren Bushnell

Collicott, Jacob Grant

Collins, Laurence Gerald

Colton, Ethan Theodore

Colvin, David Leigh

Colvin, William Elmer

Conover, William Bone

Cordell, Harry William

Cox, William Edward

Craig, Earl Robert

Cross, William Thomas

Crowther, Elizabeth

Cummings, John

Curran, James Harris

Cutler, Ward Augustus

Daniels, Eva Josephine

Darden, William Edward

Das, Rajani Kanta

Davenport, Frances Gardiner

Davenport, Herbert Joseph

Davidson, Margaret

Davis, Blanche

Davis, Katharine Bement

Davison, Leslie Leroy

Davison, Madeline

Dawley, Almena

Day, James Frank

DeCew, Louisa Carpenter

Dies, William Porter

Dodd, Walter Fairleigh

Dodge, LeVant

Donald, William John Alexander

Donnell, James Allister

Downey, Ezekiel Henry

Duncan, Carson Samuel

Duncan, George Edward

Duncan, Marcus Homer

Duncan, Margaret Louise

Dunford, Charles Scott

Dunlap, Arthur Beardsley

Dunn, Arthur William

Durand, Alice May

Durno, William Field

Duval, Louis Weyman

Dye, Charles Hutchinson

Dyer, Gustavus Walker

Dymond, Edith Luella

Dyson, Walter Mitchell

Easly, Walter Irving

Easton, William Oliver

Ebersole, John Franklin

Edwards, Anne Katherine

Eidson, Lambert

Ellis, Charles Hardin

Ellis, Mabel Brown

Elmore, Edward Bundette

Engle, John Franklin

Erickson, Ephraim Edward

Eslick, Theodore Parker

Eyerly, Elmer Kendall

Felton, Katharine Conway

Fine, Nathan

Fish, Alfred Lawrence

Fitzgerald, James Anderson

Fleming, Capen Alexander

Fleming, Herbert Easton

Fleming, William Ebenezer

Flocken, Ira Graessle

Foley, Roy William

Forrest, Jacob Dorsey

Fortney, Lorain

Foucht, Pearl Leroy

Francis, Bruce

Franklin, Frank George

Frazier, Edgar George

Freeark, Frederick Aaron

Freeman, Helen Alden

Freeman, Ralph Evans

Freer, Hamline Herbert

Galloway, Ida Gray

Galloway, Louis Caldwell

Gamble, George Hawthorne

Gardner, Emelyn Elizabeth

Gardner, William Howatt

Garver, Frederic Benjamin

Gebauer, George Rudolph

Geddes, Joseph Arch

Genheimer, Eli Thomas

Gephart, William Franklin

Glover, Ethel Adelia

Going, Margaret Chase

Goodhue, Everett Walton

Goodier, Floyd Tompkins

Graham, Theodore Finley

Granger, Marshall Allen

Granger, Roy T.

Grant, Laura Churchill

Gray, Edith Scott

Gray, Helen Sayr

Gray, Victor Evan

Green, Martha Florence

Gregg, Eugene Stuart

Gregory, Homer Ewart

Griffith, Elmer Cummings

Grimes, Anne Blanche

Grimson, Gudmundur

Griswold, George C.

Gromer, Samuel David

Grubb, Willard Neal

Guice, Herman Hunter

Guild, Charles Kelly

Guildford, Paul Willis

Guthrie, William Buck

Hagerty, James Edward

Hahne, Ernest Herman

Hall, Arnold Bennett

Hamilton, John Bascom

Hamilton, Robert Houston

Hammond, Alva Merwin

Hand, Chester Culver

Hanks, Ethel Edna

Harding, William Fletcher

Hardy, Eric West

Hardy, Sarah McLean

Hargrove, Pinkney Settle

Harris, Estelle

Harris, Ralph B.

Hastings, Cora Walton

Hatfield, Henry Rand

Haynes, Fanny Belle

Hearon, Cleo Carson

Hedrick, Wilbur Olin

Herger, Albert August Ernst

Herndon, Dallas Tabor

Herron, Belva Mary

Hewes, Amy

Hidden, Irad Morton

Hill, Harvey Thomas

Hinton, Vasco Giles

Hitchcock, William

Hodgdon, Mary Josephine

Hodge, Albert Claire

Hodgin, Cyrus Wilbur

Holman, Guy

Holmes, Marion

Honska, Otto James

Hope, Chauncey Edward

Hopkins, Albert Lafayette

Hopkins, John Lamar

Horner, John Turner

Hotchkiss, Irma Helen

Hourwich, Isaac A.

Howard, Earl Dean

Howe, Charles Roland

Howerth, Ira Woods

Hoxie, Robert Franklin

Hoyt, Homer

Hubbard, Howard Archibald

Hughes, Elizabeth

Humble, Henry William

Humphries, Louis Kyle

Hunt, Duane Garrison

Hunter, Estelle Belle

Huntington, Ellery Channing

Huth, Walter

Ito, Jiniro

Jacobson, Henry Anthony

Jalandoni, Jose Ledesma

Johnson, Edgar Hutchinson

Johnson, Edna Margaret

Jones, Austin Franklin

Jordan, Elijah John

Juchhoof, Frederik

Jude, George Washington

Kaiser, Arthur

Kammeyer, Julius Ernest

Karsten, Eleanor G.

Keeney, George Albert

Kelley, James Herbert

Kellor, Frances Alice

Kelly, Arthur Caryl

Kennedy, John Curtis

Kern, Robert Russ

Kerr, Robert Floyd

Kester, Roy Bernard

Kibler, Thomas Latimer

Kilpatrick, Elizabeth Smith

King, Benjamin Walter

King, Harriet Gertrude

King, James Alexander

King, James Stanhope

King, William Lyon Mackenzie

Kinsman, Delos Oscar

Kirkham, Francis Washington

Kling, Henry Frank

Kobayashi, Kaoru

Koepke, Frank Oswald

Kyrk, Hazel

Lamar, Clyde Park

Lamborn, William Henry

Landis, George Butts

Lane, Elmer Burr

Lang, Ellen Flora

Lange-Wilkes, Friedrich Fred

Larkin, Manuel Lippitt

La Rowe, Eugene

Latourette, Lyman Ezra

Lauck, William Jett

Lauder, Charles Edward

Laune, Ferris Finley

Lavery, Maud Ethel

Leacock, Stephen Butler

Learned, Henry Barrett

Leavitt, Orpha Euphemia

Le Drew, Henry Herbert

Lee, Mary Margaret

Leff, Samuel

Lefler, Shepherd

Legh, Sydney Cornwall

Lenhart, Harry Hull

Lennes, Nels Johan

Leonard, Walter Anderson

Lewis, Henry

Lewis, Neil Madison

Lindholm, Svanto Godfrey

Lippincott, Isaac

Lipsky, Harry Alexander

Lobdell, Charles Walter

Logan, Harold Amos

Logan, John Lockheart

Loomis, Milton Early

Loveless, Milo James

Lowry, Russell

Lucas, William Hardin

Luehring, Frederick William

Lurton, Freeman Ellsworth

McAfee, Lowell Mason

McClintock, Euphemia E.

MacClintock, Samuel Sweeny

McCord, Robert Bryan

McCrimmon, Abraham Lincoln

McCurdy, Raymond Scott

McCutchen, George

McDonald, Julius Flake

McDonald, Neil C.

McElroy, Charles Foster

McGaughey, Hester Grier

McGee, Walter Scott

MacGibbon, Duncan Alexander

Machen, John Gresham

McIntosh, Donald Howard

McKenzie, Floyd Stanley

McKinley, Alexander Daniel

McKinley, Gertrude

Kinney, Winfield Scott

McLean, Earl

MacLean, Murdoch Haddon

McLean, Simon James

Maclear, John Fulton

McMullen, Samuel

MacQueary, Thomas Howard

Magee, James Dysart

Magee, James Edward

Mangold, George Benjamin

Manly, Basil Maxwell

Mann, Albert Russell

Marsh, Benjamin Clarke

Martin, Asa Earl

Martin, William Chaille

Marxen, William Bartenick

Matheny, Francis Edmund

Mather, Arlen Raymond

Matlock, Ernest

Maw, Vung Tsoong

Maynard, Archibald Benton

Meade, Edward Sherwood

Meek, James Rariden

Menge, George John

Merrell, Oscar Joe

Merritt, Albert Newton

Merry, Paul Horace

Miller, Christian A.

Miller, Clarence Heath

Miller, Edmund Thornton

Miller, Frieda Segelke

Miller, Roy Newman

Miller, Wiley Austin

Million, John Wilson

Millis, Harry Alvin

Mills, Florence Howland

Mitchell, James Ennis

Mitchell, Wesley Clair

Moffat, James Ernest

Monroe, Paul

Montgomery, Louise

Montgomery, Stafford

Moore, Blaine Free

Moore, Stephen Halcut

Morris, Robert

Mosser, Stacy Carroll

Moulton, Harold Glenn

Mumford, Eben

Munn, Glenn Gaywaine

Nagley, Frank Alvin

Nash, Walter Dudley

Naylor, Augustine Francis

Neff, Andrew Love

Neill, Charles Patrick

Nesbitt, Charles Rudolph

Newton, John Reuben

Nida, William Lewis

Niece, Ralph Harter

Northrup, John Eldridge

Norton, Elvin Jensen

Norton, Grace Peloubet

Nourse, Edwin Griswold

Noyes, Edmund Spencer

O’Brien, Charlotte Louise

O’Dea, Paul Montgomery

O’Hara, Frank

Okada, George F.

Olin, Oscar Eugene

Padan, Robert Samuel

Paden, Thomas Hosack

Parker, Bertrand De Rolph, Jr.

Parker, Norman Sallee

Parker, Robert Lincoln

Parker, Ulysses Simpson

Parish, Charles O.

Paschal, Rosa Catherine

Patterson, Ernest Minor

Patton, Eugene Bryan

Pattrick, John Hezzie

Payne, Walter A.

Peabody, Susan Wade

Pease, Theodore Calvin

Pease, William Arthur

Perrine, Cora Belle

Peterson, Otto Edward

Phillips, Ulrich Bonnell

Pierce, Paul Skeels

Polzin, Benzamin Albert

Porter, Nathan Tanner

Potts, Charles Shirley

Powell, Bert Eardly

Powell, Leona Margaret

Prescott, Arthur Taylor

Price, Maude Azalie

Primm, Clarence J.

Putnam, James William

Putnam, Mary Burnham

Quaintance, Hadley Winfield

Rabenstein, Matilda Agnes

Radcliffe, Earle Warren

Rainey, Alice Hall

Reasoner, Florence

Reed, Ralph Johnston

Refsell, Oscar Norton

Reighard, John Jacob

Remick, Mary Ethel

Remp, Martin

Renninger, Warren Daub

Reticker, Ruth

Rice, Dorothy Lydia

Richardson, Russell

Richey, Mary Olive

Richter, Arthur William

Riley, Elmer Author

Ristine, Edward Ransom

Robertson, James Rood

Rogers, May Josephine

Rosenberg, Edwin J.

Rosseter, Edward Clark

Rygh, George Taylor

Sanderson, Dwight

Sandwich, Richard Lanning

Schafer, Joseph

Scheftel, Yetta

Schloss, Murray L.

Schmidt, Lydia Marie

Schmidt, Otto Gustave

Schmitt, Ella

Schoedinger, Fred H.

Schroeder, Charles Ward

Scott, D. R.

Scott, Edward Lee

Scott, James M.

Seegmiller, Frederick Snyder

Selian, Avedis Bedros

Sellery, George Clark

Senseman, Ira Roscoe

Seward, Ora Philander

Shaw, George Washington

Shelton, William Arthur

Shepherd, Fred Strong

Shoemaker, Lucile

Shue, William Daniel

Sikes, George Cushing

Simons, Frederick Myerle

Sinclair, James Grundy

Singer, Martin

Skelton, Oscar Douglas

Slemp, Campbell Bascom

Smith, Almeron Warren

Smith, Gerard Thomas

Smith, Guy Carlton

Smith, Roy

Smith, Walter Robertson

Smyser, Seldon Frazer

Snavely, Charles

Sorenson, Alban David

Sorrell, Lewis Carlyle

Sparks, Edwin Erle

Spencer, Simpson Edward

Splawn, William Marshall Walter

Sproul, Alexander Hugh

Stark, William Belle

Stearns, Tilden Hendricks

Steiner, Jesse Frederick

Stephens, George Asbury

Stephenson, George Malcolm

Sterns, Worthy Putnam

Stevens, William Spring

Stone, Raleigh Webster

Stoneberg, Philip John

Stoner, Thurman Wendell

Stowe, Frederick Arthur

Stuart, Henry Waldgrave

Styles, Albert Frederick

Sullivan, Margaret Veronica

Sundstrom, Ingeborg

Sutherland, Edwin Hardin

Swan, Laurence Wardell

Swanson, William Walker

Swift, Elizabeth Andrews

Sydenstricker, Edgar

Tajima, Kazuyoshi

Takimoto, Tanezo

Tan, Chang Lok

Tanner, Alvin Charles

Tarr, Stambury Ryrie

Taylor, Archibald Wellington

Taylor, William G.

Temple, Frances Congdon

Teng, Kwangtang

Textor, Lucy Elizabeth

Thomas, David Yancey

Thompson, Carl William

Thompson, Charles Sproull

Thompson, Edwin Elbert

Thompson, John Giffin

Thorne, Florence Calvert

Thornhill, Ernest Algier

Thurston, Henry Winfred

Tiffany, Orrin Edward

Tilton, Howard Cyrus

Towle, Ralph Egbert

Towne, George Lewis

Treleven, John Edward

Tunell, George Gerard

Tunnicliff, Helen Honor

Turner, Mary

Updegraff, Elizabeth

Valgren, Victor Nelson

Varkala, Joseph Paul

Vassardakis, Cleanthes Aristides

Veblen, Thorstein B.

Vernier, Chester Garfield

Vogt, Paul Leroy

Vondracek, Olga Olive

Waldo, Karl Douglas

Waldorf, Lee

Waldron, George Burnside

Walker, Edson Granville

Walling, William English

Walrath, Albert Leland

Waltz, Merle Bowman

Wardlow, Chester Cameron

Ware, Richard

Warren, Henry Kimball

Warren, Worcester

Watson, Robert Eli

Watts, Cicero Floyd

Weaver, Samuel Roy

Webster, Arthur Ferdinand

Webster, William Clarence

Weisman, Russell

Wells, Emilie Louise

Wells, Oliver Edwin

West, Max

West, Victor J.

Westlake, Ruby Moss

Weston, Jessie Beatrice

Wethington, Joseph Francis

Whipple, Elliot

Whitaker, Hobart Karl

Whitcomb, Adele

White, Francis Harding

White, Henry Kirke

White, Laura Amanda

Whited, Oric Ogilvie

Wilcox, William Craig

Wildman, Murray Shipley

Willard, Laura

Williams, Arthur Rowland

Williams, Charles Byron

Williams, Frank North

Williams, John William

Williams, Pelagius

Willis, Henry Parker

Wilson, Eugene Alonzo

Winans, Clarence Henry

Winston, Ambrose Pare

Winston, James Edward

Wirt, William Albert

Witmer, John Earl

Woods, Erville Bartlett

Woolley, Edwin Campbell

Wright, Helen Russell

Yahn, Harold George

Yeisaku, Kominami

Youngman, Anna Pritchett

Zaring, Aziel Floyd

Zee, Treusinn Zoen

Zimmerman, John Franklin

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DOCTORS OF PHILOSOPHY OF THE UNIVERSITY OF CHICAGO
DEPARTMENT OF POLITICAL ECONOMY

Edith Abbott (1905)

A Statistical Study of the Wages of Unskilled Labor in the United States, 1830-1900.

Charles Criswell Arbuthnot (1903)

The Development of the Corporation and the Entrepreneur Function.

Donald Elliott Bridgman (1907)

Economic Causes of Large Fortunes.

John Cummings (1894)

The Poor Law System of the United States.

Herbert Joseph Davenport (1898)

The French War Indemnity.

Katharine Bement Davis (1900)

Causes Affecting the Standard of Living and Wages.

William John Alexander Donald (1914)

The History of the Canadian Iron and Steel Industry.

Henry Rand Hatfield (1897)

Municipal Bonding in the United States.

Earl Dean Howard (1905)

The Recent Industrial Progress of Germany.

Robert Franklin Hoxie (1905)

An Analysis of the Concepts of Demand and Supply in Their Relation to Market Price.

Edgar Hutchinson Johnson (1910)

The Economics of Henry George’s Progress and Poverty.

Stephen Butler Leacock (1903)

The Doctrine of Laissez Faire.

Isaac Lippincott (1912)

The Industrial History of the Ohio Valley to 1860.

Duncan Alexander MacGibbon (1915)

Railway Rates and the Canadian Railway Commission.

Simon James McLean (1897)

The Railway Policy of Canada.

James Dysart Magee (1913)

Money and Prices: A Statistical Study of Price Movements.

Albert Newton Merritt (1906)

Federal Regulation of Railway Rates.

Harry Alvin Millis (1899)

History of the Finances of the City of Chicago.

Wesley Clair Mitchell (1899)

History of the United States Notes.

Harold Glenn Moulton (1914)

Waterways versus Railways.

Edwin Griswold Nourse (1915)

A Study in Market Mechanism as a Factor in Price Determination.

Robert Samuel Padan (1901)

Studies in Interest.

Eugene Bryan Patton (1908)

The Resumption of Specie Payment in 1879.

Oscar Douglas Skelton (1908)

An Examination of Marxian Theory.

George Asbury Stephens (1909)

Influence of Trade Education upon Wages.

Worthy Putnam Sterns (1900)

Studies in the Foreign Trade of the United States.

William Walker Swanson (1908)

The Establishment of the National Banking System.

George Gerard Tunell (1897)

Transportation on the Great Lakes of North America.

Murray Shipley Wildman (1904)

The Economic and Social Conditions Which Explain Inflation Movements in the United States.

Henry Parker Willis (1898)

A History of the Latin Monetary Union.

Anna Pritchett Youngman (1908)

The Economic Causes of Large Fortunes.

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A STATISTICAL RECORD OF GROWTH
1892-1916

1916_UCRecordGrowth

 

Source: James Laurence Laughlin, Twenty-Five Years of the Department of Political Economy, University of Chicago. Chicago: Privately printed, 1916.

Image Source: “JLL” initials from the title page, ibid.

 

 

Categories
Chicago Courses Exam Questions Suggested Reading Syllabus

Chicago. Economic Doctrine, Modern Tendencies. Lange, 1942

“Modern Tendencies in Economic Economic Doctrine” was the title of the course taught by Oscar Lange in 1942 at the University of Chicago. According to the notes to the course taken by Norman Kaplan, the first two lectures appear to be Lange’s Apologia for the rationality postulate in modern economic theory that are then followed by lectures in which many themes of Hicks’ Value and Capital are addressed. Karl Marx, Max Weber and Talcott Parsons all get mention in his reflections on the rationality postulate. One can characterise Lange’s mission here and elsewhere as seeking to graft advances in economic theory from the marginal revolution that led to neoclassical economics to the trunk of (Marxian) classical economics.

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

_____________________________________

 

[Course Announcement, Economics 303, Spring 1942]

303. Modern Tendencies in Economic Doctrine.—A critical study of controversial questions in the general body of economic theory, and of some modern developments of that theory. The fundamentals of the theory of general equilibrium, the approach to dynamic economics, the foundations of welfare economics, the place of economics among the social sciences and problems of methodology will be discussed. Prerequisite: Economics 301 or equivalent. Spring, Tu., Th., 3:30-5:30, Lange.

 

Source: University of Chicago, The College and the Divisions for the Sessions of 1941-1942. Announcements Vol. XLI, No. 10 (April 25, 1941), p 307.

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Spring, 1942

ECONOMICS 303
BIBLIOGRAPHY

Required

J. R. Hicks. Value and Capital

H. Schultz. Theory and Measurement of Demand, chap. vi

J. Dean. “Department-Store Cost Functions,” Studies in Mathematical Economic and Econometrics, p. 222.

F. Lindahl. Studies in the Theory of Money and Capital, part I [(handwritten marginal note: (Read along with dynamic part of Hicks)]

H. Makower and J. Marschak. “Money and the Theory of Assets,” Economica (Aug. 1938)

M. Kalecki. “The Principle of Increasing Risk,” Essays in the Theory of Economic Fluctuations

G. L. S. Shackle. “Expectations and Employment,” Econ. J. (Sept. 1939)

________________. “The Nature of the Inducement to Invest,” RES (Oct. 1940)

A. G. Hart. “Uncertainty and Inducements to Invest,” RES (Oct. 1940)

T. Scitovszky. “A Study of Interest and Capital,” Economica (Aug. 1940)

J. Tinbergen. “Econometric Business Cycle Research,” RES (Feb. 1940)

R. F. Harrod. “Essay in Dynamic Theory,” Econ. J. (March 1939)

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

N. Kaldor. “Welfare Propositions and Inter-Personal Comparability of Utility,” Econ. J. (Sept. 1939)

J. R. Hicks. “The Foundations of Welfare Economics,” Econ. J. (Dec. 1939)

A. P. Lerner. “From Vulgar Political Economy to Vulgar Marxism,” JPE (Aug. 1939)

H. D. Dickinson. “A Comparison of Marxian and Bourgeois Economics,” The Highway 1937

Eric Roll. “The Social Significance of Recent Trends in Economic Theory,” Canadian J. of Economics (Aug. 1940)

 

Optional

F. H. Knight. Risk, Uncertainty and Profit

G. Tintner. “A Contributionof the Non-Static Theory of Choice,” QJE (Feb. 1942)

A. G. Hart. “Anticipations, Uncertainty and Dynamic Planning,” J. of Business of the U. of C. (Oct. 1940)

J. R. Hicks. “A Suggestion for the Simplification of the Theory of Money,” Economica (1935)

P. N. Rosenstein-Rodan. “The Co-ordination of the General Theories of Money and Prices,” Economica (Aug. 1936)

J. Tinbergen. A Method and its Application to Investment Activity, League of Nations

H. D. Dickinson. The Economics of Socialism

M. H. Dobb. Political Economy and Capitalism

A. P. Lerner. “Statics and Dynamics in Socialist Economics,” Econ. J. (June 1937)

Talcott Parsons. The Structure of Social Action, chap. iv

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ECONOMICS 303
Spring, 1942

 

I. Discuss briefly the relation of the analysis of consumers’ behavior in terms of indifference curves and in terms of traditional marginal utility theory. Explain

(1) the concept of the marginal rate of substitution and its relation to marginal utility.

(2) the relation between the law of diminishing marginal utility and the convexity (toward the origin) of indifference curves.

(3) the assumptions underlying measurability of utility.

(4) the consequences which dispensing with the hypothesis that utility is measurable has for the law of diminishing marginal utility and for the Edgeworth-Pareto distinction between substitute, independent and complementary commodities.

(5) whether the use of indifference curves and of the marginal rate of substitution requires that utility be immeasurable.

 

II. Explain the difference between “co-operant” factors of production in the sense of Pigou (i.e., “complementary” factors in the sense of Edgeworth-Pareto) and complementary factors in the sense of Hicks-Allen-Schultz. Show why in the case of only two factors used to produce a product both definitions are equivalent but cease to be so if more than two factors are used. What is the purpose of replacing in the theory of production “co-operancy” by complementarity in the Hicks-Allen sense?

 

III. Describe the way in which uncertainty of price expectations influences the production plans of firms and the consumption plans of households. Explain

(1) what features of uncertain price expectations influence the planning of sales and purchases.

(2) apply your explanation to the determination of forward prices.

(3) discuss how uncertainty influences the length of the economic horizon and how this accounts for the insensitiveness of current investment to changes in interest rates.

 

IV. State the conditions of stability of general economic equilibrium and try to link them up with the relation of changes in the quantity of money to changes in the demand for cash balances. Don’t worry if you cannot answer the second part of the question. If you can answer it, give an example of a behavior of the monetary system which will make general equilibrium unstable.

 

Source: University of Chicago Archives. Norman Kaplan Papers, Box 2, Folder 6.

Image source: Wikipedia/commons.

Categories
Chicago Courses Suggested Reading Syllabus

Chicago. Introduction to Money and Banking. A. G. Hart, 1933

In the early 1930’s Lloyd Mints alternated teaching the undergraduate money and banking course at the University of Chicago (Econ 230) with the doctoral student Albert G. Hart who held the ranks of teaching assistant/instructor before receiving his Ph.D. in 1936. In Hart’s papers at Columbia University there is a copy of material for his course kept for students in the Harper Reading Room at the University of Chicago. The “Report on Conduct and Content of Course” included in this posting presents a detailed outline of his course as of its third iteration. Square brackets are used where I have supplied specific page numbers for the textbook assignments that I have found elsewhere in the same folder with this Report. 

In the Review section Hart includes among the “leading ideas” of the course: “… in fields where prices are sticky, inflation and deflation take themselves out on volume of sales and hence of production and/or employment…”

______________________

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

_________________________________

[Course Description from University of Chicago Announcements]

230. Introduction to Money and Banking.—The material in the course includes a study of the factors which determine the value of money in the short and in the long run; the problem of index numbers of price levels; and the operation of the commercial banking system and its relation to the price level and general business activity. Prerequisite: Social Science I and II or equivalent. Summer, Hart; Autumn, Mints; [Spring], Hart.

Source: University of Chicago, Announcements [for 1933-34], Arts, Literature and Science, vol. 33, no. 8 (March 25, 1933), p. 266.

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Report on Conduct and Content of Course.

Econ 230
A. G. Hart

General Remarks:

My general policy (in which I follow the suggestions of Mr. Mints) has been to conduct the course definitely as a theoretical study, with the emphasis on analysis rather than history or factual description. Class meetings are devoted largely to discussion, with inevitable lapses into lecturing when historical or factual questions cannot be avoided. My reading assignments have been light (about 100 pages a week), but are of a character to call for mulling over. So far as possible I have avoided second-hand textbook material and gone to authoritative writers. On the necessary technical banking material a textbook is inevitable, and I have used Rodkey’s Banking Process twice and Bradford’s Banking once. (To my taste the former is definitely preferable.) On other subjects I have gone to standard authorities, as Irving Fisher, J. M. Keynes, Alvin Hansen, Wesley Mitchell, D. H. Robertson. These writers are emphatically not beyond the grasp of undergraduate classes here. Some points have been emphasized by written exercises; and I have tried by giving our examinations and by putting past examinations on reserve to make my examinations a guide to what I expected students to take away with them. Full assignments, as made this summer, and past examinations are in my assignment folder on reserve in Harper main reading room.

The following scheme is that given in my assignments; the order of various points somewhat altered from time to time, especially when current events bring certain sides of the course to the fore.

 

Scheme of Course:

I.  Introduction: Money Concepts; Sketch of Monetary History; Present Circulating Medium in U. S.

Explanation of purposes of the course; the notion of money in the broader notion of circulating medium; a summary of the history of the American circulating medium; brief analysis of the current statistics on money in circulation and on bank deposits. Emphasis is laid on the fact that the class of circulating media has no clear-cut boundary, but shades off into the realm of ordinary commodities, and on the importance of bank deposits in American circumstances. Reading: Robertson, Money, pp. 1-17. Class Time: usually two, perhaps three hours.

II. The Quantity Theory of Money According to Fisher.

An analysis of the relations between quantity of money and bank deposits, their velocities, prices, and volume of transactions, through the Fisher equation. Emphasis is laid on the validity of the equation, the restricted conditions under which the Quantity Theory holds, and the consequent inadequacy of the Quantity Theory for short-period analysis; also on relative flexibility of different groups of prices. Reading: Fisher, Purchasing Power of Money, pp. 1-32, 47-54, 74-111, 184-97. Class Time: five or six hours.

III. The Quantity Theory According to the Cambridge School; European Postwar Monetary Experience.

A restatement of the Quantity Theory in “Cambridge” terms, using Keynes’ Monetary Reform as type. This is used to reinforce the analysis of the difficult “velocity” problem in the preceding section, and leads into some examination of the workings of inflation. The idea of forced saving is here brought out. Lately I am coming to doubt the pedagogical usefulness of the formulation in Monetary Reform; and I may take a different tack another time. Reading: Keynes, Monetary Reform, pp. 3-45, 46-80 [, 81-94]; Robertson, Money, e.g. 18-43. Class Time: three or four hours.

IV. Index Numbers: Refinement of Concept of Purchasing Power.

The concept of an index number of prices as reflecting changes in the value of a composite commodity of fixed make-up; index of quantity as reflecting valuations of different mixtures of goods at fixed prices. Necessity of index number analysis to put meaning into notion of price and output changes brought about by money. Emphasis is placed, of course, on fundamental notions and interpretation, not on the technique of index-number compilation. Reading: Fisher, Purchasing Power, pp. 198-233; memorandum of my own in assignment folder. I should assign Keynes [Treatise (optional), I, pp. 53-94] but for library difficulties. Written Assignment: problem in index-number computation, with simplified arithmetic, calculated to bring out differences among the various basic formulas. Class Time: three or four hours.

V. Nature of Banking and Clearing.

(In the Autumn Quarter, 1932 I put this before the treatment of monetary theory, which appears to be just about as satisfactory as the present arrangement.) Basic character of a bank; demand liabilities greater than quick assets, and demand liabilities serving as circulating medium. Mechanism of making and transferring deposits; clearing relations among banks. History of American banking. Study of bank reserves; of earning assets. Principle of credit pyramiding on increment of reserves. Reading: textbook passages [Rodkey, Banking Process, 1-86, 124-37, 137-54, 178-95, 201-224, 267-86; or Bradford, Banking, pp. 1-51, 52-96, 98-123]; Phillips, Bank Credit, chapter III [pp. 32-77]. Written Assignment or Hour Examination: reconstruction and interpretation of dismembered bank statement, involving comparison of two banks or one bank at two dates. Class Time: ten or twelve hours.

VI. Central Banking: Federal Reserve System.

Analysis of open market, re-discount and clearing functions of the Federal Reserve Banks, and of the administration of the system and its influence on the member bank reserve position. I have made no attempt to cover foreign central banking except for an hour’s lecture on the Bank of England and incidental references from this point in the course on to practices of foreign central banks. This is not because I doubt the usefulness of treating foreign banking ceteris paribus; but the marginal utility of time in a one-quarter course is so high as to put this below the zone of profitable use of resources. Emphasis is placed on the essential simplicity of central banking — holding cash reserves and earning assets and swapping them on the open market according to the position of business—, on its necessary non-profit character, etc. The leading ideas in this section are largely modeled on Mr. Mints. One of the drawbacks of using Bradford as text is the necessity of scrambling sections V and VI together to follow its arrangement. Reading: textbook passages [Rodkey, Banking Process, pp. 36-123, 196-200, 224-238; or Bradford, Banking, pp. 125-144, 145-168, 170-222, 223-247, 248-274, 311-336, 337-355]; W. R. Burgess, Reserve Banks and the Money Market, pp. 206-229; passages in Federal Reserve Bulletin [March 1932, pp. 1-5]. Written Assignment or Classroom Work: Analysis of weekly statements of Federal Reserve Banks and weekly reporting member banks; calculation of Federal Reserve reserve and collateral requirements and of free gold. [take F.R. statement for July 13 (published in morning papers July 21). Compute gold reserve requirements against deposits and notes, calculate excess gold reserves. Compute gold collateral requirement on notes, with and without Glass-Steagal arrangement, and calculate free gold on each basis.] From this point in the course the statement is discussed at some length every Friday. Class Time: five or six hours, plus a short time each week toward the end of the quarter for study of the statement.

VII. Foreign Exchange; International Banking Relations.

The mechanism of the exchange markets: acceptances, cable drafts, etc. The balance of payments and supply and demand of foreign funds; determination of the rate and adjustment of balances on and off the gold standard. Classical mechanism of adjustment; orthodox types of central bank intervention; post-war manipulative tricks in exchange market. Due largely to the trend of current events, emphasis has been placed on the determination of rates off the gold standard and on the short-run importance of flight from the currency and other types of speculative movements. Reading: as the topic is peripheral and cannot absorb much time, I have compromised between textbook readings and authoritative material, and have been assigning Taussig, Principles, vol. I, pp. 447-78 besides text-book passages. [Rodkey, Banking Process, pp. 155-68; or Bradford, Banking, 275-310; Robertson, Money, 69-91] Class Time: three or four hours.

VIII. Short Period Monetary Theory.

Inapplicability of quantity theory (though not of Fisher equation) in “transition period”. Generalization of Fisher cash-transactions approach: can be used wherever flow of goods and flow of money which buys it can both be conceptually isolated. Analysis through income concepts. Hawtrey’s scheme as a special case of transactions approach; illustration of analysis by his cycle theories. Concept of forced savings. Reading: Fisher, Purchasing Power, 55-74; Robertson, Money, 92-116; Hawtrey, Currency and Credit, 1-64. Class Time: four to six hours.

IX. Business Cycles.

Concept of business cycle; basic types of series showing cycle. Types of business cycle theories. Problems of “overproduction” in various senses. Reading: Mitchell, Business Cycles, the Problem and its Setting, pp. 1-60. Class Time: three to five hours.

X. Banking Policy and “Stabilization”.

General concept of stabilization – largely connotation with meaning vague. Monetary stabilization – constancy of index number or the exchange rate. Partial incompatibility of former and latter. Criteria of desirable indices to stabilize – full employment chief – point to desirability of gently raising money wages on average; consequences in other price groups. Central difficulty of price stickiness. Ways and means – inadequacy of central-bank control; inevitable influence of government finance. Savings-investment criterion of policy – its weaknesses. Reading: Robertson, Money, 144-194; Hansen, Economic Stabilization in an Unbalanced World, 3-27, 65-113, 271-314. Class Time: 4 to 6 hours.

Review:

When possible (it isn’t in the summer) I plan to devote four or five hours to systematic review. Leading ideas are brought out more clearly; especially: 1) the price level associated with the given flow of goods cannot rise, unless less goods of this group are sold or more money is spent on them; 2) when price movements are on foot the various forms of “price stickiness” make the movements of different speed and amplitude in different fields; 3) it is these relative price movements which are of practical importance; 4) in fields where prices are sticky, inflation and deflation take themselves out on volume of sales and hence of production and/or employment; 5) a banking system uncontrolled except by “qualitative” considerations will inevitably bring about inflation and deflation involving destructive movements of relative prices and of production; 6) in fact these considerations do not even enable a banking system to protect itself against a heavy proportion of failures in deflation.

 

Discussion of Above Scheme:

It will be observed that the course as I have given it contains little or no discussion of two topics which occupy a great deal of the literature, viz.: bimetallism and the classification of money under various heads (commodity, token, fiat etc.) Both of course come in for incidental mention; but neither, it seems to me, belongs in a one-quarter course here and now. Bimetallism, as discussed in the books, is today rather a historical relic; the effective issue is not double versus single standard, but gold standard versus “paper standard”. Systematic classification of money has distinct uses; but I’m inclined to trust to the passage on the subject in Robertson and avoid wasting class time on it. The necessary discussion of monetary history affords opportunity to talk a bit about both these matters; but a student who had taken the course with me could probably not explain the relation (e.g.) between over-valued and under-valued metal, or between proper bimetallic and limping standards.

More serious than these omissions of subject-matter is another type of omission: the course as I give it makes little attempt to inoculate the student against cranks by systematic study and dismemberment of the work of theoretical bunglers. It is a rather serious pedagogical defect to include little reading with which the instructor thoroughly disagrees. My excuses firstly that the course must take up more material then can be so treated in a single quarter and secondly that it seems to me the line between correct and incorrect analysis is fairly clearly drawn in the elementary phases of monetary and banking theory here treated. But frankly I’m afraid I must lay more weight on the first excuse than the second.

Albert G. Hart.

 

 

Source: Columbia University Libraries, Manuscript Collections. Albert Gailord Hart Papers: Box 61, Folder “Assignments and Other Memoranda for Reserve in Harper Reading Room/Sec 2 Ec 230 1933 Chicago, Money (Summer Quarter)”.

Image Source:  ditto.