Category: Chicago

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Chicago Exam Questions Suggested Reading Syllabus

Chicago. Syllabus and Final Exam, International Monetary Economics. Metzler, 1971

The two items below (syllabus and final exam) were incorrectly filed in Lloyd A. Metzler’s papers at Duke. I accidentally stumbled upon both today and thought that rather than trusting my memory of the locations of the syllabus and final exam for Economics 370 in 1971, I’d just transcribe and post the two artifacts today. According to the biographical note below, Lloyd Metzler retired from the University of Chicago in 1971 so this must have indeed been the last time that he taught international monetary economics at Chicago.

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Biographical Note

Lloyd Appleton Metzler was born on April 3, 1913 in Lost Springs, Kansas. He attended the University of Kansas, where he studied economics under John Ise and earned a Bachelor’s degree in 1935 and an MBA in 1938. Metzler then entered Harvard University. He served as an instructor and tutor at Harvard and completed a Ph.D. in economics in 1942. His dissertation, “Interregional Income Generation,” earned him the Wells Prize. That same year, Metzler was the recipient of a Guggenheim fellowship.

From Harvard, Metzler went on to Washington, D.C., where worked for the Office of Strategic Services and several economic policy and planning commissions between 1943 and 1946. Metzler joined the research staff of the Board of Governors of the Federal Reserve System in 1944. In 1946 he returned to academia when he accepted a teaching position at Yale University. He soon left Yale for the University of Chicago in 1947, where he remained for the rest of his career.

Dr. Metzler survived surgery for a brain tumor in 1952, and with the help of his wife Edith, managed to continue teaching and writing for the next twenty years. He served as Editor of the Journal of Political Economy from 1966 until his retirement in 1971. Metzler made numerous contributions to business cycle literature, macro-monetary theory, tariff theory, mathematical economics, and the field of international trade. The Metzler paradox, Laursen-Metzler effect, and Metzler matrix, all bear his name. He died on October 26, 1980.

Source: University of Chicago Library. Guide to the Lloyd A. Metzler Papers 1941-1948.

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For Intertemporal Comparison

Syllabus and readings for Economics 370 in 1950.

Exam for Economics 370 in 1953.

Syllabus, readings and final exam for Economics 370 from Winter Quarter 1967.

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ECONOMICS 370

Monetary Aspects of International Trade
Major Topics and Reading List
Winter, 1971

  1. Mechanism of the Foreign Exchange Market
    1. Alan R. Holmes and Francis Schott, The New York Foreign Exchange Market. New York: The Federal Reserve Bank of New York, 1965, Chapters 1-6.
    2. Frank A. Southard, Jr., Foreign Exchange Practice and Policy. New York: The McGraw-Hill Book Company, 1940.
    3. Norman Crump, The ABC of the Foreign Exchange. London: MacMillan and Company, Ltd., 1951.
    4. James E. Meade, The Theory of International Economic Policy: Vol. I. The Balance of Payments. London: Oxford University Press, 1951, Chapter 1.
  2. The Quantity of Money, the Rate of Interest, and the Price Level
    1. James Tobin, “The Monetary Policy and the Management of the Public Debt: The Patman Inquiry,” Review of Economics and Statistics, Vol. XXXV, No. 2, May 1953, pp. 118-27.
    2. Subcommittee on General Credit Control and Debt Management of the Joint Committee on the Economic Report, Hearings on the Question, What Should our Monetary and Debt Management Policy Be? 82nd Congress of the United States 1952, pp. 688-711, 691-98. (These pages include the testimony of Milton Friedman and Paul Samuelson).
    3. Robert V. Roosa, “Interest Rates and the Central Bank,” In Money, Trade, and Economic Growth, in honor of John Henry Williams, New York: The Macmillan Company, 1951.
    4. Lloyd A. Metzler, “Wealth, Saving, and the Rate of Interest,” Journal of Political Economy, Vol. LIX, No. 2, April 1951, pp. 93-116.
    5. Robert A. Mundell, “The Public Debt, Corporate Income Taxes, and the Rate of Interest,” Journal of Political Economy, Vol. LXVIII, No. 6, December 1960, pp. 622-26.
    6. George Horwich, “Real Assets and the Theory of Interest,” Journal of Political Economy, Vol. LXX, No.2, April 1962, pp. 158-69.
    7. Don Patinkin, Money, Interest, and Prices, 1st edition, Evanston: Row, Peterson and Company, 1956, Part II.
  3. The Role of Money in International Adjustment: Full Employment and Under-Employment
    1. J. M. Keynes, Treatise on Money: Vol. 1. The Pure Theory of Money. London: Macmillan and Company, 1935, Chapter 21.
    2. Lloyd A. Metzler, “The Theory of International Trade,” from A Survey of Contemporary Economics, Howard S. Ellis, Editor, Homewood, Ill.: R.D. Irwin, Inc., 1948.
    3. Lloyd A. Metzler, “The Process of International Adjustment Under Conditions of Full Employment: A Keynesian View,” first delivered before the Econometric Society, 1960, republished in AEA, Readings in International Economics, Vol. XI, Richard Caves and Harry Johnson, editors, Homewood, Ill.: R. D. Irwin, Inc., 1968, Chapter 28.
  4. Free-Market Exchange Rates
    1. A. J. Brown, “The Foreign Exchanges,” in Oxford Studies in the Price Mechanism, T. Wilson and P.W.S. Andrews, editors, Oxford at the Clarendon Press, 1951, Part II.
    2. Sidney Alexander, “Effects of a Devaluation on a Trade Balance,” International Monetary Fund Staff Papers, Vol. Il, No. 2, April 1952.
    3. Milton Friedman, “The Case for Flexible Exchange Rates,” in Essays in Positive Economics, Chicago: The University of Chicago Press, 1953, pp. 157-203.
    4. Joan Robinson, “The Foreign Exchanges,” in Essays in the Theory of Employment. Oxford: Basil Blackwell, 1947, Part III.
    5. Lloyd A. Metzler, “Exchange Rates and the International Monetary Fund,” in International Monetary Policies, Postwar Economic Studies, No. 7, Washington, D.C.: The Board of Governors of the Federal Reserve System, September 1947.
    6. Rudolph R. Rhomberg. “A Model of the Canadian Economy under Fixed and Fluctuating Exchange Rates,” Journal of Political Economy, Vol. LXXII, No. 1, February 1964, pp. 1-31.
  5. Forward Exchange Rates
    1. Paul Einzig, The Theory of Forward Exchange. London: Macmillan and Company, Ltd., 1937.
    2. Paul Einzig, A Dynamic Theory of Forward Exchang. London: Macmillan and Company, New York: St. Martin’s Press, 1961.
    3. Alan R. Holmes and Francis Schott, The New York Foreign Exchange Market. New York: The Federal Reserve Bank of New York, 1965, Chapters 7-8.
    4. Paul Einzig, “Some Recent Development in Official Forward Exchange Operations,” Economic Journal, Vol. LXXIII, No. 290, June 1963, pp. 241-53.
    5. Paul Einzig, “Some Recent Changes in Forward Exchange Practices,” Economic Journal, Vol. LXX, No. 279, September 1960, pp. 485-95.
  6. The Balance of Payments and the Concepts of Income
    1. R. F. Bennett, “Significance of International Transactions in National Income,” in Studies in Income and Wealth, Vol. VI. New York: The National Bureau of Economic Research, 1943.
    2. U. S. Department of Commerce, Income and Output, 1958 Supplement to the Survey of Current Business.
  7. The Theory of Income Transfers
    1. J. M. Keynes, “The Transfer Problem,” Economic Journal, Vol. XXXIX, No. 153, March 1929, pp. 1-7.
    2. B. Ohlin, “The Reparation Problem: A Discussion. I. Transfer Difficulties, Real and Imagined,” Economic Journal, Vol. XXXIX, No. 154, June 1929, pp. 172-78.
    3. J. M. Keynes. “The Reparation Problem: A Discussion. II. A Rejoinder,” Economic Journal, Vol. XXXIX, No. 154, June 1929, 179-82.
    4. J. Rueff, “Mr. Keynes’ Views on the Transfer Problem,” Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 388-99.
    5. B. Ohlin, “Rejoinder to J. Rueff,” Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 400-04.
    6. J. M. Keynes, “Reply to J. Rueff,” Economic Journal, Vol. XXXIX, No. 155, September 1929, pp. 404-08.
    7. L. A. Metzler, “The Transfer Problem Reconsidered,” Journal of Political Economy, Vol. L, No. 3, June 1942, pp. 397-414.
    8. H. G. Johnson, “The Transfer Problem and Exchange Stability,” Journal of Political Economy, LXIV, No. 3, June 1956, pp. 212-25, Republished in International Trade and Economic Growth. London: George Allen and Unwin, Ltd., 1958, Chapter VII.
    9. L. A. Metzler, “Flexible Exchange Rates, The Transfer Problem, and the Balanced-Budget Theorem,” Rivista Internazionale di Scienze Economiche e Commerciale, Anno XIII, No. 4, April 1966, pp. 301-18. Republished in Essays in Honor of Marco Fanno, Vol. II, Tullio Bagiotti, editor, edizioni cedam, Padova, 1966, pp. 449-76.
  8. Evolution of the International Monetary System
    1. Randall Hinshaw. Toward Currency Convertibility. Princeton University, Essays in International Finance, No. 31, 1958.
    2. Robert Triffin, Europe and the Money Muddle, New Haven: Yale University Press, 1957.
    3. Charles P. Kindleberger. The Dollar Shortage, Cambridge, Mass.: The Technology Press, New York: John Wiley and Sons, Inc., 1950.
    4. Robert Triffin, “The International Monetary Position of the United States,” in The Dollar in Crisis, Seymour E. Harris, editor, New York: Harcourt, Brace and World, Inc., 1961.
    5. Hal B. Lary, Problems of the United States as World Trader and Banker, Princeton: Princeton University Press for the National Bureau of Economic Research, 1963.
    6. Robert Triffin, The Evolution of the International Monetary System: Historical Reappraisal and Future Perspectives. Princeton Studies in International Finance Section. Princeton University, 1964.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder “The Dust Proof File”.

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L. A. Metzler

ECONOMICS 370
FINAL EXAMINATION
WINTER, 1971

Answer all questions

  1. It is frequently said that forward purchases and sales have a two-fold effect upon the assets and liabilities of the bank making the forward transactions. When a bank makes a forward purchase, for example, it is entitled to receive a given amount of foreign currency some time in the future and this right to receive foreign currency constitutes an asset. On the other hand, when the bank receives the foreign currency, it is obligated to pay a given amount of its own currency, and exchange, and this obligation constitutes a liability. Conversely, when the bank makes a forward sale, it is obligated to deliver a given amount of foreign currency some time in the future and such an obligation constitutes a liability. But when the bank delivers the foreign currency, it is entitled to receive a given quantity of domestic currency to complete the transaction, and this receipt constitutes an asset.
    1. In view of the two-fold effect of both forward sales and purchases, how can you justify the inclusion of forward sales as liabilities and the inclusion of forward purchases as assets in an account of the bank’s foreign currency position?
    2. If it is actually true that both sales and purchases increase assets and liabilities by the same amount, what does this imply with respect to the bank’s ability to put itself in a closed position by means of operations on the forward exchange market?
  2. The table, below, presents the yield on 90-day Canadian treasury bills (rc), the yield on 90-day U.S. treasury bills (rus), the 90-day forward exchange rate (FR), and the spot exchange rate (SR) for Canadian currency. The yields for both Canadian and United States bills are stated on an annual basis and the exchange rates represent the price, in United States dollars, of one unit of Canadian dollars. The table covers various periods of time, from A to I.
Period of time Yield on
90-day Canadian treasury bills (rc)		 Yield on
90-day
U.S.
treasury bills (rus)		 90-day forward exchange rate (FR) Spot exchange rate (SR)
A .05 .06 1.0100 1.000
B .06 .05 1.0050 1.000
C .06 .04 1.0025 1.000
D .07 .03 0.9975 1.000
E .05 .04 0.9900 1.000
F .04 .05 0.9950 1.000
G .02 .04 0.9975 1.000
H .02 .06 1.0025 1.000
I .01 .05 2.0050 2.000

On the basis of the information given in the table above, you are asked to:

    1. Indicate which periods are periods of short-term potential capital outflow (O), and which periods are periods of short-term capital inflow (I) from the point of view of U.S. banks.
    2. Prepare a table showing the profits or losses on security transactions, the profits or losses on currency transactions, and the net outflow or inflow margin for all time intervals from A to I.
    3. Show what transactions a U.S. bank would make in carrying out a short term covered capital outflow and what transactions the bank would make in carrying out a short term capital inflow. From this information, show that arbitrage activities of the U.S. bank always influence rc, rus, FR, and SR in such a way as to put the market values back on the interest parity line.
    4. Comment on the stabilizing effects of interest arbitrage.
  1. Professor Alexander maintains that devaluation will be ineffective unless fiscal measures are taken to control spending.
    1. Discuss Alexander’s argument.
    2. Is it also applicable against a system of flexible exchange rates? Explain.
  2. Country A and Country B are trading with each other under a system of flexible exchange rates. Country A makes a unilateral transfer of t currency units, payable in the currency of B. On the assumption that both countries balance their budgets, prove that factor income remains unchanged in both countries while net output rises in A and falls in B. Give both an algebraic and a commonsense explanation of these results. What bearing do these results have on the controversy between Keynes and Ohlin concerning German reparations?
  3. The success of the Canadian experiment with flexible exchange rates is frequently given as an argument for the introduction of flexible exchange rates as a means of eliminating the deficit in the U.S. Balance of Payments.
    1. Would Alexander’s absorption principle apply to this situation?
    2. Can you see any reason why the comparison between Canada and the United States might be inappropriate?

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder “Econ 371 [sic] Reading List.”

Source Image: Posting by Margie Metzler on the Metzler Family Tree at the genealogical website, ancestry.com.

Categories
Agricultural Economics Chicago Economists

Chicago. Economics Ph.D. alumnus, Edwin Ferdinand Dummeier, 1926

 

From the University of Chicago economics department records we can assemble a fairly complete account of the process of earning a doctorate in economics for the agricultural economist Edwin F. Dummeier who entered the Chicago program with a year’s worth of graduate credit. Dummeier’s five quarters in Chicago (from Summer 1925 through Summer 1926) in residence seems to be a lower bound at a time when the official regulations had been changed to state that as a general rule three years residence in graduate studies were expected of Ph.D. degree candidates. 

It appears to me that Dummeier’s undergraduate degree at L.S.U. was the result of regular summer school attendance while teaching/administering during the regular school year. His collection of graduate credits from the Universities of California, Wisconsin, and Colorado also show a considerable portion of summer school credit. It is interesting to see that he could apparently be appointed the principal of a Louisiana high school without having a completed college education. 

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Brief c.v. of Edwin Ferdinand Dummeier

1887, April 4. Born in Metropolis, Illinois.

1910-1917. Principal of Leesville, Louisiana High School

1917-1918. Principal of Minden High School, Webster Parish, Louisiana.

1918. A.B. Louisiana State University

1921. M.A. University of Colorado.

1921-23. Instructor in economics, Washington State College (Pullman, WA).

1923-1925. Assistant Professor, Washington State College (Pullman, WA).

1926. Ph.D. University of Chicago. Thesis: The marketing of Pacific coast fruits in Chicago.

1926-46. Professor of Economics, State College of Washington, Pullman, Wash.

1944, June 19. Married Binna Mason, school teacher

1946, June 17. Died in Salt Lake City, Utah.

Biggest publication:

Edwin F Dummeier and Richard Brooks Heflebower. Economics: with applications to agriculture. New York: McGraw-Hill, 1940.

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Dummeier’s application for graduate credit towards an economics Ph.D. from Chicago

The University of Chicago
The Graduate School of Arts and Literature
Office of the Dean

August 19, 1925

Mr. J. A. Field
Faculty Exchange:

I enclose application for graduate credit from Mr. Edwin F. Dummeier who is a graduate student in residence this quarter. While he is doing most of his work in Commerce and Administration at present, he wishes to go into Political Economy, and so I am asking you to estimate the amount of credit in Pol. Econ. that ought to be given in majors and in quarters for the work he lists. Please return the certificates from the University of California and the University of Wisconsin.

Sincerely yours,
[signed]
G. J. Laing
Dean

GJL:M

________________________

Department will recognize three quarters of graduate work

August 29, 1925

Dean G. J. Laing
University of Chicago
Faculty Exchange

My dear Mr. Laing:

I enclose herewith application for graduate credit for Edwin F. Dummeier which I have certified as representing in my judgment the substantial equivalent of three quarters of graduate work in Political Economy.

Sincerely yours,

[unsigned copy, J.A. Field]

JAF:MLH
Enclosure

________________________

Dummeier proposing his examination fields and requesting departmental review of all his coursework to identify any further course requirements

5757 University Avenue, Chicago, Illinois,
January 21, 1926

Professor L.C. Marshall, Chairman,
Department of Political Economy
The University of Chicago.

Dear Sir:

Announcements from the Department of Political Economy to persons intending to become candidates for the Ph.D. degree state that “the candidate, subject to the advice and approval of the Department,” may choose his fields for specialization and written examination from designated lists. Other announcements of the University state that in the Graduate Schools of Arts, Literature and Science the courses to be offered must be “approved by the Deans of the Graduate Schools at least six months before the degree is conferred. The individual courses must receive the approval of the heads of the departments concerned.” It is also stated that the Department of Political Economy will ordinarily approve as an essential part of a student’s preparation for the degree a considerable amount of work in allied departments.”

In consideration of these announcements I am herby submitting the following statement of fields which, with the approval of the Department, I propose to designate as fields of specialization and examination: (1) General Economic Theory; (2) Market Structures and Functions, this being the thesis field; (3) The Pecuniary and Financial System; (4) Transportation and Communication.

Furthermore, I am submitting a list of courses in the past pursued and a statement of courses which I have taught, in order that the Department may take definite action of a character which will enable me to plan my work in the future with an assurance that all course requirements are being met.

My undergraduate work included courses in the principles of economics and accounting. It also included courses in history and political science.

Graduate work thus far completed and courses for which I am registered for this quarter are as follows:

Political Economy

At the University of Colorado, six quarters, 1919-1921
Money and Banking 24 weeks 2 hours per week
Taxation 36 weeks 2 hours per week
Socialism 24 weeks 2 hours per week
Immigration 6 weeks 5 hours per week
Business Organization 6 weeks 5 hours per week
Seminar in Economics 12 weeks 2 hours per week
Thesis, “Financing Public Education in Colorado,” 6 quarter hours credit.

 

At the University of California, summer 1923
Transportation, principles [& Hist. (Dixon)] 6 weeks 5 hours per week
Transportation, current problems 6 weeks 5 hours per week
Pacific Coast Rate Problems 6 weeks 5 hours per week

 

At the University of Wisconsin, summer 1924
The Classical Economists [Physiocrats thru J. S. Mill] 6 weeks 5 hours per week
Farmer Movements 6 weeks 5 hours per week
Statistics 6 weeks 7½ hours per week

 

At the University of Chicago, summer, spring, and winter Qtrs. 1925-26
Course No.
334 Money and Prices 1 major
388A Cooperative Marketing 1 major
388B Marketing Farm Products 1 major
301 Neoclassical Economics 1 major
345 Personnel Administration 1 major
386 Terminal Marketing Research 1 major
C & A. 375 Business Forecasting 1 major
335 Bus.Finance and Investment 1 major
499 Terminal Marketing Research 1 major

 

Sociology

At the University of Colorado, 1919-1921
Social Problems (poverty) 12 weeks 2 hours per week
Rural Sociology 12 weeks 2 hours per week
Psychological Sociology 6 weeks 5 hours per week
Social Viewpoints and Attitudes 6 weeks 5 hours per week
Criminology 12 weeks 2 hours per week

 

History

At the University of Colorado, 1919-1921
Colonization of North America 24 weeks 2 hours per week
The Westward Movement 6 weeks 5 hours per week

 

Education

At the University of Colorado, 1919-1921
History and Philosophy of Education 24 weeks 3 hours per week
Seminar in Education 24 weeks 2 hours per week

 

Political Science

At the University of Colorado, 1919-1921
Municipal Functions and Problems 12 weeks 3 hours per week
International Law 12 weeks 3 hours per week
World Govt. and Politics 6 weeks 5 hours per week
Political Parties and Party Problems 24 weeks 2 hours per week

 

Summary

Majors
Work in Political Economy at other institutions, certified by the Department of Political Economy of the University of Chicago as equivalent to… 8½
Work in Political Economy at the University of Chicago… 9
Work in Sociology at other institutions, certified by the Dept. of Sociology of the Univ. of Chicago as equiv. to … 2½
Work in History at other institutions, certified by the Dept. of History of the Univ. of Chicago as equiv. to… 1½
Work in Education at other institutions, certified by the School of Education of the Univ. of Chicago as equiv. to… 2
Work in Pol. Science at other institutions, certified by the Dept. of Pol. Science of the Univ. of Chicago as equiv. to… 3
Total majors in Political Economy… 17½
Total majors in other subjects… 9
Grand Total… 26½

 

For the past four years I have been a member of the faculty of the Department of Economics of the State College of Washington, for the past three years with the rank of assistant professor of economics. During this time I have taught the following subjects, having given courses in all of these subjects several times: (1) Economic Geography; (2) Foreign Trade; (3) Railway Transportation; (4) Agricultural Economics; (5) Marketing Farm Products; (6) Co-operative Marketing of Farm Products; (7) Money and Banking; (8) Principles of Economics, elementary and intermediate courses.

For the spring quarter I am planning to register for Political Economy 303, Modern Tendencies in Economics, to continue the research work on my thesis subject, and if advised to do so to register for one additional course. I do not expect to be able to complete the thesis by the close of the spring quarter, but am trusting that I may be able to meet all course requirements and to complete the thesis and take the thesis examination before the close of the summer quarter.

It appears evident that my course requirements are dependent upon the amount of work in allied departments, consisting of courses already completed in other institutions, which will be approved by the Department as a part of the preparation for the degree. I am submitting this statement in the hope that I may have from the Department at an early date definite notification of the courses which I shall have yet to complete in fulfillment of the requirements for the degree.

Certified transcripts of records of courses completed at other institutions and of the valuations placed upon this work by the various departments of the University of Chicago, as enumerated in this communication, are on file in the office of the Deans of the Graduate Schools.

Respectfully yours,
[signed]
Edwin F. Dummeier

________________________

Dummeier proposing his doctoral thesis subject

5757 University Avenue, Chicago, Illinois,
January 21, 1926

Professor L.C. Marshall, Chairman,
Department of Political Economy
The University of Chicago.

Dear Sir:

I am hereby presenting for your approval the subject and a brief prospectus of the thesis which I propose later to submit in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Political Economy. The subject of the proposed thesis is “The Marketing of Pacific Coast Fruits in Chicago”.

While the prospectus is designed to give some idea of the general nature of the proposed study, it does not indicate the degrees of relative intensity with which it is proposed to treat the various phases of the general subject. All phases will be treated to the extent of critically surveying the existing literature pertaining to them and making some supplementary field study. But the study as a whole will be based not on existing literature, but on original field observations and a study of commercial records. As an exhaustive study of all phases of proposed subject by these methods is beyond the capacity of any one individual it is proposed to investigate with much more detail some phases than others. The degree with which this specialization will be devoted to particular ones of the subheads listed in the outline will depend in part upon the degree of cooperation received from the trade and, therefore cannot be definitely stated in advance. Representative, however, as a phase of the general subject in regard to which there is at the present time only the most meager published information and which may be studied is the fruit and vegetable auction as a marketing institution. As the auction is mostly used in connection with the marketing of Pacific Coast products this would be a natural subdivision of the main subject.

The whole study has as its primary object the evaluation of existing methods in regard to these products as to their social efficiency and social significance.

Yours respectfully,
[signed]
E. F. Dummeier

Thesis
THE MARKETING OF PACIFIC COAST FRUITS IN CHICAGO

Chapter

  1. Introduction
    1. The importance of the study
    2. Method of treatment
      1. Emphasis on a few commodities, especially apples
      2. Emphasis on change and development in marketing methods
    3. Specific objectives
      1. Primary objective: To evaluate comparative merits of different methods of performing marketing services.
      2. Secondary objectives: To show the relation of Chicago to the producing areas; to describe physical facilities of the market and the physical movements of these products thru the market; to determine costs of marketing these products and reasons for these costs; to examine factors influencing demand and to examine trends of change and their causes.
  2. Chicago and the Regions of Supply
    1. Data on production, arrivals, and unloads at Chicago. Data on storage movements and reshipments from Chicago.
    2. The historical development of the industry, its present status, and its current trends.
  3. The Physical Facilities of the Market and Physical Commodity Movements
    1. Transportation services and facilities
    2. Wholesale receiving
    3. Auctions
    4. Peddlers
    5. Retailers
  4. Carload Distributors, Brokers, and Carload Receivers
    1. Numbers and classes of dealers
    2. Marketing services performed and trade practices
    3. Charges for services
  5.  Auctions
    1. Extent of movement thru auctions
    2. Auction methods
    3. Auction charges
  6. Jobbers and Shippers
    1. Numbers and classes of dealers
    2. Methods of buying and selling
    3. Margins and costs
  7.  Retailers
    1. Numbers and classes of dealers
    2. Methods of buying and selling
    3. Margins and costs
  8. Marketing Costs
    1. Critical consideration of marketing costs, especially of oranges and apples, on the basis of differences in marketing methods employed until time of sale to jobbers.
    2. Particular consideration of the desirability of selling at auction.
  9. Marketing Costs (Continued)
    1. Critical consideration of marketing costs subsequent to time of sale to jobbers
  10. Factors Influencing Demand
  11. Summary and General Conclusions

________________________

Department approves Dummeier’s thesis subject

January 27, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

The Department of Political Economy accepts as your thesis subject “The Marketing of Pacific Coast Fruits in Chicago.”

It is our understanding that you will carry on work in connection with this thesis under Mr. Duddy.

Yours very sincerely,
[Unsigned copy, L.C. Marshall]

LCM:MLH

________________________

Department Head Marshall asks his colleague to double-check the Dummeier transcripts for possible feedback

The University of Chicago
Department of Political Economy
February 1, 1926

Mr. C. W. Wright
University of Chicago
Faculty Exchange

My dear Mr. Wright:

I enclose a letter from Mr. Dummeier. I have written him concerning the field “Transportation and Communication.” Perhaps you will wish to look over his statement of courses and credits to see if any action needs to be taken concerning them.

Yours very sincerely,
[signed]
L.C. Marshall

LCM:MLH
Enclosure

________________________

The University of Chicago
Department of Political Economy

Edwin F. Dummeier

A. B. University of Louisiana, 1918
A. M. University of Colorado, 1921

Summer Quarter, 1925

Pol Econ. 334 A
C & A 388 A
C & A 388B A

French and German Exams. Passed. Sept. 1, 1925

Grad. Work in other insti. September 1, 1925

University of Colorado
Soc. (Faris) 2½ majors
Residence credit 1 Quarter

Grad. work in other insti. September 3, 1925

University of Colorado
Pol. Econ. (Field) 5½ majors
Residence credit 2 Quarters

 

University of California and Wisconsin
Pol. Econ. (Field) 3 majors
Residence credit 1 Quarter

 

Autumn Quarter, 1925

Pol Econ. 301 A
C & A 313 [blank]
C & A 345 A
C & A 385 A
C & A 386 A

 

Grad. work in other insti. Jan 4, 1925

University of Colorado
Educ. (C.H. Judd) 2
Pol. Sci. (C.E. Merriam) 3
Residence Credit 1 Quarter
History (C.F. Huth) 1 ½
Residence Credit ½ Quarter

________________________

Department requests clarification regarding the proposed field “Transportation and Communication”

February 1, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

It seems entirely probable that the Department will approve the four fields suggested in your letter of January 21st.

The Department has, however, asked me to secure from you a more detailed statement of your understanding of the territory that would be covered by the field “Transportation and Communication.”

Yours very sincerely,

[Unsigned: L. C. Marshall]

LCM:MLH

________________________

Schedule of written field examinations

February 2, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

This is just to let you know that I have you scheduled to take the following examinations on the dates mentioned.

February 13, Economic Theory. 8:30 A.M.

February 20th, Pecuniary and Financial Systems, 8:30 A.M.

February 27th, Transportation and Communication 8:30 A.M.

The questions will be given out at Harper E 57. Please let me know at once if the above schedule is incorrect.

Yours very sincerely,
[Unsigned copy: Margaret McKugo]

MM:MLH

________________________

Dummeier clarifies his understanding of the field “Transportation and Communication”

5757 University Avenue, Chicago, Illinois,
February 4, 1926

Professor L.C. Marshall, Chairman,
Department of Political Economy
The University of Chicago.

Dear Sir:

In reply to your letter of February 1st I am hereby submitting the following as my understanding of the territory that would be covered by the field “Transportation and Communication”, which was proposed by me as one of my fields of specialization in my candidacy for the Ph.D. degree.

As to agencies, I understand the field to include all the agencies of land and water transportation. Major emphasis should, however, be placed upon railway transportation in the United States. Agencies supplying communication other than physical transportation would include the telephone and telegraph. As compared with railway transportation these are of less importance, and as they present relatively few distinctive problems they may be said to be somewhat incidental to the main field.

With regard to the above mentioned agencies consideration should be given to phenomena and problems of the character of those with which Political Economy in general concerns itself. These should include the following:

  1. The historical development of the various transportation agencies,
  2. The services performed and economic significance of the various agencies,
  3. Theories of rate making, particularly railway rates,
  4. Rate making practices and rate systems,
  5. Railroad finance,
  6. Sufficient knowledge of the technic of operation to be able to consider intelligently questions of public policy with regard to railroads and other transportation agencies,
  7. The economic and legal bases of the regulation of public carriers and the history of their public promotion and regulation,
  8. Various present day transportation problems in which the general public has an interest, such as valuation, consolidation, and government ownership or operation.

The above indicates the general scope and to some extent the relative emphasis of the constituent parts of the field of Transportation and Communication as a field of Political Economy as I understand it.

Most respectfully yours,
[signed]
Edwin F. Dummeier

________________________

Wright’s Response to Marshall’s Feb. 1, 1926 Inquiry

THE UNIVERSITY OF CHICAGO
The School of Commerce and Administration

Memorandum to Marshall from Wright
[no date, but probably early Feb. 1926]

After surveying Mr. Dummeier’s record of courses taken, it seems to me that in the four fields chosen he has not covered the following.

Theory: History of Theory. Only partly covered.

Unsettled Problems. He plans to take this in the Spring.

Marketing: Advertising. I am not certain as to this.

Transportation: Public Control of Railroads.

Of the specific general requirement he has covered Statistics and Accounting but not Economic History of the U.S. I gathered from the discussion at the Dept. meeting that the members of the Department would refuse to tell him specific courses that were required, though personally I do not consider this a reasonable attitude.

C.W.W.

________________________

Response of Department to Dummeier’s follow-up regarding his examination field “Transportation and Communication”

March 2, 1926

Mr. E. F. Dummeier
5737 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

I spoke to Mr. Wright and he told me that your recommendation had come before the Department, but he could not at this time give you a written statement concerning it. He is turning your letter over to Mr. Marshall who will write you as soon as he returns to the office.

Yours very sincerely,
[Unsigned copy: Margaret McKugo]

MM:MLH

________________________

Economics Department Record of Dummeier’s Written Ph.D. Examination Grades
(First attempt)

Winter Qr. 1926

E. F. Dummeier

Economic Theory

Viner — Pass Fair
Clark — B

Pec. And Fin. Sys.

Mints — Failed
Wright — C
Meech — Failed

Trans. & Com.

Clark — Passed
Sorrell — [Blank]
Duddy — Passed

________________________

Department’s decisions
regarding credits recognized
plus advice on “possible gaps”

March 16, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

After examining your credits as officially certified by various departmental representatives it seems clear that you have met the general requirements as far as the total number of majors is concerned.

The only issues outstanding are these:

  1. There is a requirement that a candidate for the doctor’s degree shall have covered work in the Economic History of the United States. I am uncertain whether you have taken care of this requirement.
  2. You will, of course, need to be prepared to pass the examinations in four fields. As you know no specific courses are required in connection with these examinations. The candidate is expected to work up each field in a rather comprehensive way.

Certain questions arise in my mind with respect to these examinations. Have you prepared yourself in the field of Public Control of Railroads? Have you done so in the general field of Advertising? Have you done so in the History of Economic Thought? You will, I am sure, realize that these inquiries do not indicate the necessity of your taking specific courses in these territories. I mention them merely as possible gaps in your thinking in these fields.

Yours very sincerely,
[Unsigned copy: L. C. Marshall]

LCM:MLH

________________________

Dummeier informed that he passed two of his three written examinations
[Carbon copy]

March 24, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

The final reports for the written examinations taken by you during the Winter Quarter, 1926 in partial satisfaction for the degree of Doctor of Philosophy are as follows:

Economic Theory — Passed

Pecuniary and Financial System — Failed

Transportation and Communication — Passed

Yours very sincerely,
[Unsigned copy: L. C. Marshall]

LCM:MLH

________________________

Economics Department Record of Dummeier’s Written Examination Grades
(Second attempt: Pecuniary and Financial Systems Field)

Pecuniary and Financial Systems

Mints — Pass
Cox — Pass

________________________

Dummeier told he successfully passes his third written examinations
[Carbon copy]

June 8, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

I am pleased to report that you have passed the Pecuniary and Financial System examination, taken in the Spring Quarter, 1926, in partial satisfaction for the degree of Doctor of Philosophy.

Yours very sincerely,
[Unsigned copy: L. C. Marshall]

LCM:MLH

________________________

Dummeier’s Principal Advisor not in Chicago during the summer quarter (when the thesis is expected to be completed and submitted)

The University of Chicago
Local Community Research Committee
Address: Faculty Exchange. The University of Chicago

June 7, 1926

Mr. L.C. Marshall, Dean
Department of Political Economy
University of Chicago

Dear Mr. Marshall:

My absence during the Summer Quarter means that some one must supervise the students who have been working under me in community research. Mr. Dummeier, who plans to get his degree in Political Economy, is quite well along with his work and I should like to recommend that either Mr. Wright or Mr. Viner look after him. He is going to develop a section on price study and Viner would be a help there.

The other men, Davidson, Journey and Weaver, are planning to come up in Commerce and Administration, and I am making recommendations to Mr. Spencer to take care of them. In the case of all of these men, I shall want to read copies of their theses as they come in. Both Mr. Dummeier and Mr. Journey have their outlines fully developed and have begun to write.

Yours very truly,

[signed]
E.A. Duddy

EAD:JS

________________________

Department Head Marshall turns to Jacob Viner
for last-minute thesis advice

June 8, 1926

[Memorandum to:] Jacob Viner

[From:] L. C. Marshall

Mr. Dummeier has been working with Mr. Duddy, but Mr. Duddy is to be away this coming summer. I wonder if you would be willing to look after Mr. Dummeier’s work on the thesis since he is planning to develop a section on price study.

The matter is one upon which the Department needs to take action in view of the fact that Mr. Dummeier plans to take his degree in Political Economy.

LCM:MLH

_______________________

Viner “gratefully” accepts the “chore”

The University of Chicago
Department of Political Economy

June 10, 1926

Mr. L. C. Marshall
Faculty Exchange

My dear Mr. Marshall:

You may send on Mr. Dummeier to me. I will take over the job of supervision of his research during Mr. Duddy’s absence, inasmuch as I have been unable to think up a good excuse for evading the chore.

Gratefully yours,
[signed]
Jacob Viner

_______________________

Notification that Viner Will Serve as Substitute Research Supervisor

June 17, 1926

Mr. E. F. Dummeier
5757 University Avenue
Chicago, Illinois

My dear Mr. Dummeier:

I have had a note from Mr. Viner indicating his willingness to supervise your research in Mr. Duddy’s absence.

Yours very sincerely,
[Unsigned copy: L. C. Marshall]

LCM:MLH

________________________

Official Examination Notice for E. F. Dummeier
(with Prof. Meech’s scribbled note that he will be unable to attend)

________________________

COURSES PRESENTED BY EDWIN F. DUMMEIER
FOR THE DEGREE Ph.D. IN ECONOMICS
AT THE UNIVERSITY OF CHICAGO

Majors
Pol. Econ. 334 Money and Prices. Hardy 1
C & A 388 B Marketing Farm Products, Weld 1
C & A 388 A Cooperative Farm Marketing. Jesness 1
Pol. Econ. 301 Neo-Classical Economics. Viner 1
C & A 345. Personnel Administration. Stone 1
C & A 386 Terminal Marketing Research. Duddy 1
C & A 355 Business Finance and Investment. Meech 1
C & A 375 Business Forecasting. Cox 1
Pol. Econ. 499 Terminal Marketing Research Duddy 3
Pol. Econ. 499 Terminal Marketing Research. Viner 3
TOTAL 14

Graduate Work at Other Institutions

Economics
Transportation. Principles Univ. of Cal. Dixon
Transportation. Current Problem[s]. Univ. of Cal. Dixon
Pacific Coast Rate Problems. Univ. of Cal. Harraman
Farmer Movements. Univ. of Wis. Hibbard
The Classical Economists. Univ. of Wis. Scott
Statistics. Univ. of Wis. Lescohier
Money and Banking. Univ. of Colo. Ingram
Taxation. Univ. of Colo. Ingram
Immigration. Univ. of Colo. Ingram
Business Organization. Univ. of Colo. Ingram
Seminar in Economics. Univ. of Colo. Bushee
Thesis “Financing Public Education in Colorado.”
Total (Field) 8½
Economics Total   22½

 

 

Education Total Judd 2
Sociology Total Faris 2½
Political Science Total Merriam 3
History Total Huth 1½
Grand Total   31½

 

________________________

Memo from Millis announcing/reminding about oral examination date
[Carbon copy]

The University of Chicago
The Department of Political Economy

August 17, 1926

Memorandum to:

N. W. Barnes [Associate Professor of Marketing]
P. A. Douglas [Associate Professor of Industrial Relations]
L. H. Grinstead [Visiting Assistant Professor from Ohio State University]
G. G. Huebner [Visiting Professor from the U. of Pennsylvania]
L. C. Sorrell [Assistant Professor of Transportation and Communication]
Jacob Viner [Professor of Political Economy]
C. W. Wright [Professor of Political Economy]

From: H. A. Millis

This is just to let you know that E. F. Dummeier will come up for his oral examination on Monday, August 23, at 3 o’clock in Harper E 57.

If it is impossible for you to be present will you please notify Miss McKugo in Harper E 57?

________________________

Memo from Millis announcing/reminding about oral examination date
[Carbon copy]

[Memorandum To:] L. S. Lyon [Visiting Professor from Robert Brookings Graduate School of Economics and Government]

[From: H. A. Millis]

August 18, 1926

This is just to let you know that E. F. Dummeier will come up for his oral examination on Monday, August 23, at 3 o’clock in Harper E 57.

If it is impossible for you to be present will you please notify Miss McKugo in Harper E 57?

________________________

A “Thank-you” to Marshall for his support
Note: Dunnmeier’s article on auctions apparently never published

 

The State College of Washington
Pullman, Washington
Department of Business Administration

December 28, 1926.

Professor Leon C. Marshall
Department of Economics
University of Chicago
Chicago, Illinois

Dear Professor Marshall:

I am enclosing herewith a review of Benton’s “Marketing of Farm Products” for the Journal of Political Economy. I had hoped to have gotten this review to you at an earlier date, but teaching duties have kept me so busy as to delay its completion somewhat longer than I anticipated.

Not long ago I received a letter from professor Duddy, in which he stated that you had spoken to him with regard to my writing an article for the Journal on the fruit auction as a marketing agency, the article to be based on my first hand research work in Chicago. I have started the preparation of such an article and hope to submit it within the very near future.

I have found on my return to my duties here that my year at the University of Chicago has been of very large benefit to me, and I continue to feel most grateful to you for your part in making that year possible.

Most cordially yours,
[signed]
E. F. Dummeier

EFD/EIB

Source:  University of Chicago Archives. Economics Department. Records & Addenda. Box 6, Folder 12.

Image: “Dummeier Rites Are Held Today,” Spokane Chronicle, June 18, 1946.

Categories
Chicago Exam Questions

Chicago. Price Theory (B). Final Exam Questions. Friedman, December 1959

 

Along with the exam questions and answers transcribed below, Milton Friedman’s papers include the official course registration list together with his hand-written grades that were calculated based on the results of this exam and a problem set. During the autumn quarter of 1959 thirty students were enrolled in Friedman’s course with two students receiving incompletes. For the remaining 28 students 2 A’s, 10 B’s, 10 C’s, 5 D’s and 1 F grades were awarded. The two A grades went to Arthur Lionel Broida (1963 economics Ph.D. “Liqudity as a Variable in Monetary Analysis”) and Charles N. Tingley [probably Charles Nicholas Tingley, Yale 1957. Worked for Humble Oil and Refining Company  at the time of his marriage to Cary Clift MacFadden in 1964].

______________________________

ECONOMICS 301
[Price Theory B]
Final Examination
December 16, 1959

  1. [30 points total] The accompanying graph gives a set of consumption indifference curves for two commodities or services each of which for some range of quantities and in combination with some amounts of the other is capable of being either a “good” or a “bad” (a “product” or a “factor”) like books and bookshelves, or cutting the grass and playing the piano (either of which may be “labor” or “play”). Of the curves drawn, I1 corresponds to the lowest level of utility. Answer this question on this paper, wherever relevant filling in the blanks.

    1. [3 points] What is the interpretation to be placed on point B? [Answer: Bliss]
    2. [8 points total; 2 points each] Mark of I1 into four sectors [Answers circled on figure] according as

(1) _____both X and Y are “goods”
(2) _____X is a “good” and Y is a “bad”
(3) _____X is a “bad” and Y is a “good”
(4) _____X and Y are both “bads”

Use letters to designate the dividing points between the sectors and enter the description of each sector in the proper place above. [Answer: see X’s used in figure]

    1. Budget lines AC and A´C´ are the usual type which supposes that the consumer must pay for both products and has a fixed sum to spend on both.

(1) [1 point] The consumer’s optimum position for A´C´ is [Answer: D´].
(2) [4 points] The consumer’s optimum position for AC is [Answer: B].

    1. On budget lines EF and GH, one of the commodities is something the consumer must pay for (it is a “product” and has a positive price), the other is something he gets paid to accept (it is a “factor” and has a negative price). In addition for both lines, the consumer has a fixed sum derived from some other source to spend.

(1) [2 points] For EF [Answer: Y] is the product; [Answer: X] is the factor.
(2) [2 points] For GH [Answer: X] is the product; [Answer: Y] is the factor.

    1. For OK also one commodity is a product and one is a factor but there is no additional source of expenditures and hence no way from the line itself to know which is which. However, it does make a difference to the optimum position which is which.

(1) [2 points] If X is a factor and Y a product, then the optimum point is [Answer: B].
(2) [2 points] If Y is a factor and X a product, then the optimum point is [Answer: K].
(3) [5 points] Can you suggest a simple graphical way of distinguishing the two cases? [Answer: Shading areas].

  1. [30 points] Find the mistakes (there are at least six) in the accompanying diagram showing long and short run marginal and average cost curves, and explain the general principle corresponding to each particular mistake.

[Answers: (1)SRMC ≠ SRAC at minimum; (2) SRAC < LRAC; (3) SRMC ≠ LRMC where SRAC = LRAC; (4) SRMC < SRAC when SRAC rising; (5) SRMC < LRMC when to left of point of tangency of SRAC and LRAC; (6) LRAC> LRMC when LRAC rising or LRMC ≠ LRAC when LRAC max).]

  1. [24 points] Define briefly the following terms [3 points each]:
    1. Marginal revenue
    2. Fixed cost
    3. Income elasticity
    4. Profit
    5. Production function
    6. Diminishing returns
    7. Inferior good
    8. Luxury
  2. [30 points] Discuss the following quotations:
    1. (from a newspaper story) “The Sun Rose Bar and Grill…advertised ‘the largest glass of beer in the city for five cents’ and did a tremendous business in eight-ounce glasses of beer as soon as the public realized it was no April Fool proposition…
      ‘If enough of us do this’ said…one of the proprietors, ‘the brewers will have to cut prices!’”.
    2. (from a newspaper story) “Domestic producers of oil contend that unrestricted imports hurt them not only because they swell the supply, but because a barrel of foreign crude costs about $1 less than a comparable barrel of U.S. crude.”
    3. “All of this is to say, of course, that in practice what we have to reckon with is not a unique marginal cost for a given level of output, but a complex of marginal costs, each of which is pertinent to a particular period of time. As a longer period of time is considered, more of the ‘fixed factors’ become variable. Because of this greater flexibility in the production process, long-run marginal cost will generally be less than short-run marginal costs.” A. Bergson in A Survey of Contemporary Economics.

 

Source: Hoover Institution Archives. Milton Friedman Papers, Box 77, Folder 2: “University of Chicago, Econ. 301”.

Image Source: Detail from picture of Milton Friedman at the Center for Advanced Study in the Behavioral Sciences, Stanford. University of Chicago Photographic Archive, pf1-06234, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Funny Business

Chicago. Lyrics to “The Law (of Diminishing Disciples)”. By Anonymous, 1960’s?

One can only presume that the following song was sung to a doggeralized version of the inspiring hymn “I shall not be moved”, though I am unable to fit the Chicago lyrics to the tunes used for any of these classic covers:

Dream Team version:  Jerry Lee Lewis, Elvis Presley, Carl Perkins and (probably not) Johnny Cash

The civil rights version (The Freedom Singers)

The union version (Pete Seeger and Chorus)

Perhaps someone is still alive who knows who penned this masterpiece of economics irony?  Asking for generations of economists yet unborn as well as for all the boomers and beyond still among us.

________________

THE LAW

(Anonymous, U. of Chicago)

I

In the days of old
And in every land
Economics was free
And supply meant demand

Adam Smith propounded it
No one has confounded it
Praise be to our theory
We shall not be moved

There were no unions
All men were bossed
Marginal output
Met marginal cost

Ricardo repeated it
No one defeated it
Praise be to our theory
We shall not be moved

The utilities moved
In harmonious flow
Through natural channels
To where they should go

Marshall repolished it
No one demolished it
Praise be to our theory
We shall not be noved

Marginal product is
The perfect gauge
For capital’s gain
And the worker’s wage

Douglas computed it
No one refuted it
Praise be to our theory
We shall not be moved

There were no barriers
And no controls
The system created
And reached its own goals

Friedman restated it
No one deflated it
Praise be to our theory
We shall not be moved

The weavers wove
The spinners spun
They always had jobs
In the very long run

Smith propounded it
No one confounded it
Ricardo repeated it
No one defeated it
Marshall repolished it
No one demolished it
Douglas computed it
No one refuted it
Friedman restated it
No one deflated it
Praise be to our theory
We shall not be moved

II

These man were thinkers
Deep and profound
Their assumptions well based
Their logic sound

Their laws have developed
In several stages
Are now well-grounded
Will live through the ages

But as they develop
From leader to follower
The thinking becomes
Just a little bit hollower

If one looks at history
From beginning to end
Within it there is
This secular trend:

In the earlier men
Originality burns
But the neo’s are met
With smaller returns

This function descends
From great things to trifles
This is The Law
Of diminishing disciples.

Source: Harvard University Archives, Papers of Zvi Griliches, Box 129, Folder “Faculty skits, ca. 1960s”.

Categories
Chicago Funny Business

Chicago. West Side Story Number from an economics skit, ca. 1962

These parody lyrics come from pages of University of Chicago economics skits from the 1960s that had been saved by Zvi Griliches and that can be consulted now in the Zvi Griliches papers collection in the Harvard University Archives. The reason we can date this artifact with confidence is because the following children’s rhyme almost immediately follows “Please Mr. Harry Johnson” featured below.

(To the tune of „Mary had a Little Lamb“)

Harvard School has gone away, gone away, gone away
Harvard School has gone away
To Washington D.C.

MIT has joined them too, joined them too, joined them too
MIT has joined them too
Advising Kennedy

Link to the film version of the original “Dear Officer Krupke” from West Side Story.

Also worth noting: that the students’ friend for learning price theory instead of relying on George Stigler’s book was Richard Leftwich’s The Price System and Resource Allocation (incidentally the same textbook was assigned for the microeconomics semester (Fall semester) of Early Concentration Economics my freshman year at Yale 1969-70).

________________________________

(To the tune of “Dear Officer Krupke” from West Side Story)
[ca. 1962]

Please Mr. Harry Johnson
It’s easy to explain
They told me Keynes was silly
And Hansen just a pain
Velocity is the main thing
And interest a passing stress
Leapin’ lizards, that why I’m a mess.

Chorus: 

Gee Prof. Johnson
we’re very upset
we never had the love that every child ought to get
we ain’t no delinquents, we’re misunderstood
deep down inside us there is good
there is good
there is good
like inside of each of us there’s good.

Oh Mr. Bailey listen
You’ve got to understand
All my life they’ve taught me
Investment lacks demand
No body ever told me
to buy a foot of land
Crawlin’ catfish, that’s why I’ve been canned.

(Repeat Chorus till last three lines)

Hear oh Mr. Friedman
I want make it clear
Always I’ve considered
Children sweet and dear
No one ever told me
Of production they’re a tool
Gosh almighty that’s why I’m a fool.

(Repeat Chorus minus last three lines)

Oh Mr. Metzler hear me
It’s simple to conceive
The BB schedule threw me
The CC did deceive
With your Keynesian leanings
I really couldn‘t cope
Goodness gracious, that’s why I’m a dope.

(Repeat Chorus…)

Dear Professor David
Please lend to us an ear
All these expectations
The present did make queer
The future was the present
The present—there was none
Really truly, that’s why I’m so dumb

 (Repeat Chorus…)

Dear Sweet Professor Stigler
We all have read your book
The fun is in the footnotes
At which we love to look
But we go back to Leftwich
For Economic sense
Heaven help me, that‘s why I‘m so dense.

(Repeat Chorus…)

Now to conclude my story
I’d like to say tonight
Why it’s so very difficult
for us to be alright
Whatever one pronounces
The others say “it’s rot”
Mama mia that’s why I’m a sot.

Dear muddled department – we’re very upset
(rest of chorus…)

Source: Harvard University Archives, Papers of Zvi Griliches, Box 129, Folder “Faculty skits, ca. 1960s”.

Image Source: Random undocumented discovery in the internet.

Categories
Chicago Columbia Economist Market Economists

Chicago. Harry Johnson opposes major appointment to be offered to Gary Becker, 1964

HarryJohnsonGaryBecker

From the perspective of today it is rather difficult to imagine that the idea of bringing favorite son Gary Becker back to the University of Chicago from Columbia could have faced any, much less, serious resistance from within the economics department. But as the following letters from Zvi Griliches’ papers in the Harvard archives show, Harry Johnson’s displeasure with this prospect was a force taken most seriously by several of his colleagues, at least in the Spring of 1964. Perhaps more was at play than Johnson’s principle objection to a Becker hire:

“…his accomplishments consist mainly in doing more competently what various members of the department already do, and have been doing for a long time, and not in doing well what the department does not do and ought to be doing if it expects to attract good students and maintain its leadership among the graduate schools of the continent, I think that it would be a grave error of strategy in the development of the department to go after him.”

Johnson offered another interesting claim with regard to 1964 Chicago faculty expectations for a Ph.D. thesis:

“I have noticed among some of the graduate students the notion that the Ph.D. thesis is to be completed with the minimum of intellectual input and a few single-equation regressions. This is contrary to the intention of the Ph.D. regulations (‘the quality and length of a good journal article’)…”

Perhaps the birth of the concept of a job-market-paper?

_____________________

THE UNIVERSITY OF CHICAGO
CHICAGO 37 • ILLINOIS
DEPARTMENT OF ECONOMICS

May 20, 1964

To: Al Harberger, Zvi Griliches

From: Al Rees

Re: Gary Becker

The question of an appointment for Gary will be discussed at a Department Meeting on June 4. I enclose a copy of a confidential memo from Harry in which he opposes the appointment. Harry will be in Italy on June 4 and cannot present his views in person. I would very much like to have your reaction before the meeting.

You should also know that appointments are being offered this week to Jimmy Savage and to Hans Theil, both at high salaries and both joint with the School of Business. There seems to be a very high probability that both will be accepted.

I am somewhat concerned about the number of tenure posts the Administration will let us have; in particular, I do not want to do anything that might “freeze out” Larry Sjaastad, for whom I have very high hopes.

Another consideration is the effect on Harry of making a senior appointment that he opposes. He seems to feel somehow outnumbered and is still actively considering a move to London.

Gregg has already put to you the case for Gary; in any case you know his stengths too well to need to be reminded of them.

[signed] Al

_____________________

 UNIVERSITY OF CHICAGO

Date May 19, 1964

CONFIDENTIAL

To: A. Rees
From: H.G. Johnson
In re: [Economics] Department Meeting, June 4th

As I will not be at the departmental meeting on June 4th, I am taking the unusual course of putting on paper my views about certain matters due for discussion, on which I would have spoken.

I. A. (1) The thesis prospectus seminar on Choudhri was dissatisfied with the prospectus; it considered making him prepare a new prospectus, but decided instead to make him get agreement from the three members of his Committee on a new draft. Earl Hamilton was in favor of another prospectus seminar, but was overruled. I have had second thoughts, and believe that the matter should be reconsidered, for the following reasons:

(a) next year’s money workshop will be in different hands than this year’s; I am worried that, in the rush to get students past their prospectus seminar, we will land next year’s workshop with a batch of poorly thought out prospectuses that will have to be patched up with great labor.

(b) Choudhri has an excellent record; he should be able to do much better, and we should make him do better–if we let him get by with low-quality work, we are doing his future career a disservice.

(c) I have noticed among some of the graduate students the notion that the Ph.D. thesis is to be completed with the minimum of intellectual input and a few single-equation regressions. This is contrary to the intention of the Ph.D. regulations (“the quality and length of a good journal article’), bad for student morale, and inimical to good teaching. An example in this case would be salutary, and it would do Choudhri himsèlf little harm and probably some good.

I. A. (1) I would like to recommend strongly that we go after R. A. Mundell for the Ford Fellowship for 1965-66. Mundell is one of the most original and elegant moentary theorists going: he has contributed to the theory of economic policy under fixed and floating exchange rates, and started off the analysis of optimum currency areas, and he has made a number of contributions to the price theory of money and of inflation. He is also a first-class international trade and general value theorist, and a man who is always ready for an intelligent argument. Apart from our mathematical economists, we have no-one here with Mundell’s interest in pure monetary and value theory; and we have no-one with his practical experience at the IMF. I should add that I have suggested Mundell partly because I have talked with him, and he would like to spend 1965-66 in this area.

I. B. (2) Just as strongly, I feel that the department should not pursue the proposal to offer a tenure appointment to Gary Becker. I have a high respect for Becker’s theoretical abilities; but as his accomplishments consist mainly in doing more competently what various members of the department already do, and have been doing for a long time, and not in doing well what the department does not do and ought to be doing if it expects to attract good students and maintain its leadership among the graduate schools of the continent, I think that it would be a grave error of strategy in the development of the department to go after him. 

In addition, I would point out that Becker is probably the most distinguished graduate this department had had in recent years, and that going after him would be a repetition of the cannibalization-of-the-young policy that in my judgment has seriously weakened this department in the past decade or so. Unless we get our good graduates established in good departments in other Universities, we are going to have to live with the present image of the Chicago School in the profession at large, and we are not going to have representatives in other good universities steering good students towards us. If we persistently try to bring our own best back, we will defeat ourselves in the long run in two ways: we will not get the students; and we will not get the top-quality men we should get either, because we are bound to miss out on some of our own, and the fact that a new non-Chicagoan will necessarily be one of a minority outgroup will make the place unattractive to such men.

I am also fairly sure that Becker would not come, because he is intelligent enough to know that he should not come and begause he is well entrenched at Columbia, where a number of senior men are due to be replaced and will be replaced by men of his own

_____________________

THE UNIVERSITY OF CHICAGO
CHICAGO 37 • ILLINOIS
DEPARTMENT OF ECONOMICS

June 15, 1964

Professor Zvi Griliches

The Maurice Falk Institute for
Economic Research in Israel
17, Keren Hayesod Street
Jerusalem, Israel

Dear Zvi:

I have your letter of June 7.

At the Department Meeting a week ago last Friday, we took no action on Richard Moorsteen other than agreeing to invite him to come to Chicago for a visit next fall. We agreed to invite Bob Mundell to join our faculty for the year 1965-66 on the Ford Foundation Professorship.

The Department took no action on my proposal to offer a major appointment to Gary Becker. It is likely that the question will come up again next fall and you will be here then to state your own point of view.

It is quite clear now that Theil is not going to give us his decision until after his return to the Netherlands. At the moment I am fairly optimistic that when he makes his decision, it will be favorable. Theil has been offered a quite good package, I think, and I judge from conversations with him that he feels he also has a good package.

Furthermore, Judy got the impression that Laura Theil would be favorable to coming here.

You ask in the postscript to your letter whether I got a raise. I presume that what was in your mind was the question: Will I get a raise if the chairmanship is offered to me and I accept it?

I can’t answer your  question for sure since the chairmanship has not been offered to me. Indeed, I have taken steps at this end to try to insure that it won’t be offered to me. If it is offered to me, it is very unlikely I will accept it. Indeed, I can’t imagine that the terms on which it would be offered would be sufficiently attractive to induce me to accept.

Sincerely,

[signed] Gregg

H.G. Lewis

HGL/agm

Source: Harvard University Archives, Papers of Zvi Griliches, Box 129, Folder „Correspondence, 1960-1969“.

Image Sources: Harry Johnson (Archives of two giants of economics donated to the U Chicago Library. U Chicago News, October 25, 2018); Gary Becker (University of Chicago Booth School Nobel Laureate Page for Gary Becker).

Categories
Chicago Exam Questions

Chicago. Final exam from Economics 301 (Price Theory), Autumn Quarter 1960

The following exam comes from a graduate course in the price theory and distribution sequence at the University of Chicago taught in the Autumn quarter of 1960. This copy was found in Milton Friedman’s papers at the Hoover Institution Archives in the folder “Econ. 301” which also includes exams from 1959 and 1964 that can be attributed to Friedman. Still, I am not yet certain who was the author of the exam questions for autumn 1960. More than likely it was indeed Milton Friedman, but this needs to be checked.

_________________________

Economics 301
Final Examination
December, 1960

I.  Indicate which alternatives, if any, are correct or fill in the indicated blanks. Where you think it required, briefly justify your answer.

  1. Marginal revenue (a) cannot (b) may (c) must rise as output increases.
  2. A monopolized product initially sells for $1. A tax is imposed on the product. A tax of t cents per unit will reduce marginal revenue at the pre-tax output (a) more, (b) less, (c) the same amount, (d) sometimes more sometimes less than a tax of t per cent.
  3. In the preceding example, the imposition of a tax of t cents will lead the monopolist to reduce output (a) more, (b) less, (c) the same amount, (d) sometimes more sometimes less than a tax of t per cent.
  4. A reduction in demand for a product is followed by a rise in quantity sold despite no change in conditions of supply. It follows that the product is being produced (a) in a competitive industry with increasing returns, (b) in a competitive industry with external diseconomies, (c) by a monopolist, (d) this result is impossible under any of the preceding conditions.
  5. Assume that the government has been supporting the price of wheat by buying any wheat offered to it at its support price. Suppose it abandons the program. In the new position of long period equilibrium the total amount received by producers will rise (a) only if the market demand for wheat is inelastic in the range between the support and new price, (b) only if the market demand for wheat is elastic in this range, (c) whatever the demand elasticity, (d) under no circumstances.
  6. An individual buys four commodities, W, X, Y, and Z, currently spending one-quarter of his income on each. The income elasticity of W and X are 2; of Y, 1. The income elasticity of Z is _________?
  7. Consider three demand curves for commodity X: A, for given money income and other prices; B for given apparent real income in Slutsky’s sense; C, for given real income in Hicks’ sense. Let all three curves go through the point (po, xo). If X is a superior good, then for a price higher than po, the quantity demanded will be larger for ____ than for ____ than for ____ (Insert A, B, C, in correct spaces).
  8. Suppose po = $2, xo = 40, the corresponding money income is $200, and the income elasticity of demand for x is unity. Suppose that at a price of $2.50, the quantity demanded on Curve A is 20. Then the income compensation required to pass from A to B is $ _____ (be sure to indicate sign of change) and the quantity demanded on curve B is _____.
  9. If long run average cost (LRAC) equals short run average cost (SRAC) at an output on the falling segment of the LRAC curve then short run marginal cost (SRMC) (a) exceeds, (b) equals, (c) is less than long run marginal cost (LRMC) at that output.
  10. If LRAC is rising and less than SRAC, then SRMC is (a) rising, (b) falling, (c) greater than SRAC, (d) less than SRAC.
  11. In a discussion of the World Series last fall, Jones offered to take either side of a bet with Smith involving a payment of $2 by one party if the Pirates won, of $1 if the Yankees did. It follows that Jones’ estimate of the probability that the Yankees would win is _____ and that his utility function of income is (a) concave upward, (b) linear, (c) concave downward, (d) not concave upward, (e) not concave downward.
  12. Alternatively, Jones refuses to take either side of the preceding bet but offered to take either side of a bet involving a payment of $200 by one party if the Pirates won or of $100 if the Yankees did. This behavior (a) contradicts or (b) is consistent with the expected utility hypothesis.

II. Translate the following quotations into economics and discuss:

  1. “Costs are down partly because contractors expanded their equipment to get ready for the Federal Government’s enlarged program. But it was cut back in 1959. … Some contractors needed work to pay for their expensive equipment, and they began making low bids, often at cost, to get the work. They complain bitterly about the price-chopping competition.” (Time, Dec. 12, 1960)
  2. “Most foods will be much more abundant and a bit cheaper in 1959 than they were this year [1958]. This optimistic forecast was made by the Agriculture Department which warned, however, that retail price cuts won’t be as deep as the prospect of plenty would seem to indicate. Higher marketing and processing costs, officials explained, will partly offset the expected decline in food prices at the farm.”

III. A consumer in a three commodity market buys the following quantities at the following prices:

Situation Price of Commodity Quantity of Commodity
X Y Z X Y Z
A 1 1 1 1 2 5
B 1 1 2 7 0 0
C 3 2 1 0 7 0

Prove that this behavior is consistent with his having constant tastes and an ordinal utility index.

IV. State briefly what seem to you the central features of Chamberlin’s analysis of monopolistic competition and Stigler’s criticism of the analysis.

Source: Hoover Institution Archives. Milton Friedman Papers. Box 77, Folder 2 “University of Chicago, Econ. 301”.

Image Source: Social Science Research Building. University of Chicago Photographic Archive, apf2-07490, Special Collections Research Center, University of Chicago Library.

Categories
Carnegie Institute of Technology Chicago Economist Market Economists Harvard M.I.T.

Chicago. Three casual letters from Cambridge, Mass. regarding young talent, 1957-59

 

In the three letters to Theodore W. Schultz transcribed for this post we witness the old-boy network at work in Chicago’s search for young talent.  Mason and Harris from Harvard share the enormous respect that Harvard Junior Fellow Frank Fisher had won from the senior professors there.  Evsey Domar hedges somewhat in his assessment of Robert L. Slighton but more or less places him in a spectrum running between Marc Nerlove and Martin Bailey closer to the latter. Other now familiar (and less familiar) names are tossed in for good measure.

____________________________

HARVARD UNIVERSITY
GRADUATE SCHOOL OF PUBLIC ADMINISTRATION

Office of the Dean

Littauer Center
Cambridge 38, Massachusetts

December 27, 1957

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago, Illinois

Dear Ted:

In addition to [John] Meyer, [James] Henderson and [Otto] Eckstein, I would also name Franklin Fisher and Daniel Ellsberg as among our really promising young men. Fisher and Ellsberg are, at present, both junior fellows. Fisher is something of a wunderkind, having graduated summa cum laude from Harvard at the age of 18. He published a mathematical article on Welfare Economics when he was a senior, and those who can understand it say it’s good. He is only 20 now, and, of course, it is difficult to say how he is going to turn out. He may be another Paul Samuelson, and on the other hand he may not. Ellsberg is another one of our summas and a very good man, indeed. I don’t think he measures up to John Meyer, but is probably in the Henderson and Eckstein category. Since I promised you six names, I will add that of [???] Miller who came to us this year from California. I have really seen nothing of him, and consequently, can no give you a first-hand judgement. My colleagues, however, think he is very good.

With best wishes, I am

Sincerely yours,
[signed] Ed
Edward S. Mason
Dean

ESM:rrl

____________________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Office of the Chairman

M-8 Littauer Center
Cambridge 38, Massachusetts

January 5, 1959

Professor Theodore Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

It was good to see you even though it was for a very short period. As you know, we include on our list of available men only those who have requested to be put on the list or who have given us their permission to have their name included in the list. It represents men who are either already Ph.D.’s or will receive their Ph.D. within the year, and who are actually available for the coming year.

[Daniel] Ellsberg will be getting his Ph.D. this year, but he is going to Rand at a salary of about $10,000. [Franklin] Fisher will not have his Ph.D. until June 1960. He is just out of college three years and has been offered an assistant professorship at Carnegie Tech. We have now promised him a similar appointment, and in fact he said he would prefer to be at Harvard.

Among other young men of talent who are now here but are not on our permanent roster are the following: Leon Moses who teaches half time in the department and does research with the [Wassily] Leontief project half time. There is a good chance that Moses will go to Pittsburgh, particularly in order to work on the metropolitan project with [Edgar M.] Hoover. Moses is an excellent man in every way and certainly of permanent quality: the same holds for Alfred Conrad who is in somewhat the same position as Moses. Incidentally, both of them have a leave for next year: There is also André Daniere who will be an assistant professor next year and who works primarily with Leontief. Daniere is another good man, though probably not quite as good as the others.

Then there are Otto Eckstein, James Henderson, Jaroslav Vanek and Louis Lefeber. They are all excellent men and in the running for a permanent appointment. Actually, during the next few years we will have but one or two openings and obviously we cannot keep all these men. There is little to choose among them and we will have a tough time making a decision. Please keep this in the highest confidence.

With kind regard, I am,

Sincerely yours,
[signed] Sey
Seymour E. Harris
Chairman

SHE/jw

____________________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
Department of Economics and Social Science

Cambridge 39, Massachusetts

January 14, 1959

Professor Theodore W. Schultz
Department of Economics
University of Chicago
Chicago 37, Illinois

Dear Ted:

Your letter of January 6, regarding [Robert L.] Slighton is not quite easy to answer. I do not know [Daniel] Elsberg [sic] or [Franklin] Fisher well enough to make comparisons, but I will try to compare Slighton with [Martin J.] Bailey and [Marc] Nerlove. From the point of view of statistical and mathematical ability, Nerlove stands in a class all by himself, and I do not think that Slighton’s comparative advantage is in those fields. As far as Bailey is concerned, he may have flashes of ideas at times superior to Slighton’s. On the other hand, I would credit Slighton with greater solidity, more common sense and better judgment. As far as long-run contributions are concerned, I don’t know on whom of the two I would bet at the moment, but Slighton would be a serious contender in any such betting.

Lloyd [Metzler]’s session went quite well. He was greeted by the audience most warmly and was pleased about the whole works very much. I am very happy that that meeting was arranged and that I could participate in it.

Please let me know if you need any additional information.

Sincerely yours,
[signed] Evsey D
Evsey D. Domar

EDD:jr

Source:  University of Chicago Archives. Department of Economics, Records. Box 42, Folder 9.

Categories
Chicago Economists Harvard

Chicago. Milton Friedman visits the Harvard Young Conservative Club, 1964

 

At the time of Milton Friedman’s talk at Harvard, reported below in the Harvard Crimson, the 1964 Republican Presidential primaries and conventions were running hot and Senator Barry Goldwater was taking a lot of flak for his opposition to the Civil Rights Act of 1964. Milton Friedman can be seen here flying wingman for Goldwater on the issue.

________________________

Friedman Cautions Against Rights Bill
The Harvard Crimson, May 5, 1964

Milton Friedman, professor of economics at the University of Chicago and bogeyman of Ec 1, last night defended the “free-market principles” of “unanimity without conformity” against encroachments by the “coercive mechanism” of “the political method.”

In a talk sponsored by the Young Conservative Club, Friedman spent most of the evening criticising the Civil Rights Bill. “The majority in this country are prejudiced,” he stated, “and it is naive–no, it’s undemocratic,–to suppose you’re going to get people to vote against themselves.”

But he also found time to consider the tax cut (“naive”), legislation guaranteeing equal wages to women (“antifeminist”) the Federal Reserve Board (“it has never worked”), the draft (“an invasion of privacy”), legislation in general (“in case after case, laws have had the opposite effect of what was intended”), and the market mechanism (“protects the interests of minoriy groups”).

The Civil Rights Bill, said Friedman, is “wrong in principle,” because it attempts to make people “conform to the values of the majority.”

This bill is made worse, he said, because in actually there is only the “appearance of a majority” in favor of passing it. “The only reason the bill has a ghost of a chance,” he said, is that Northerners will vote for it thinking it applies to the “regional problem” of the South.

“It is extraordinary to see how naive one can be in this area” of legislation, he declared. “If we pass a law saying that race shall not be a factor in employment, then what grounds do we have for opposing a law that race shall be a factor?”

The most valid grounds, he continued, are “the general principle that the state shall not interfere in these matters.”

“The Negro is undoubtedly hurt” by segregation, said Friedman, and “the appropriate recourse is to try to persuade people that they are wrong.”

However, “the most important” solution is to eliminate “barriers” to equality, specifically, fair employment practices legislation. If the free market is allowed to operate, said Friedman, prejudice will result in lower wages for Negroes.

“Each of us separately,” he said, can then “try to offset the actions of others through our own economic activity.” By being unprejudiced and hiring Negroes, “we get things at less cost,” he said. “Not only does virtue triumph–it is even rewarded.”

Source: The Harvard Crimson Archive.

Image Source: University of Chicago Photographic Archive, apf1-06231, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economics Programs Economists Faculty Regulations Graduate Student Support

Chicago. H. Gregg Lewis proposes a “labor laboratory”. Ca. early 1950s.

 

Thanks to a prompt from Beatrice Cherrier (a.k.a. Twitter’s undercoverhist), I have transcribed the following documents found together in the economics department records in the University of Chicago archives. We catch a glimpse of H. Gregg Lewis’ early vision of a “labor laboratory” for the training of budding labor economists in the craft of empirical economic research. Serendipitously we also discover the deep self-doubt plaguing Lewis that he shared with the chair of his department at the time, T. W. Schultz.

For much more on Chicago’s workshop system, see:

Ross Emmett.” Sharpening Tools in the Workshop: The Workshop System and the Chicago School’s Success” in Building Chicago Economics: New Perspectives on the History of America’s Most Powerful Economics Program,  pp. 93-115, Robert van Horn, Philip Mirowski and Thomas Stapleford, eds., Cambridge University Press, 2011. ​There may be slight differences between the published version of the paper and the one on SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1014015

In preparing this post I found the following testimony of a former student of Lewis who went on to a most distinguished career in labor economics (who also happens to have taught my daughter an honors undergraduate class in statistics at the University of Texas).

Daniel S. Hamermesh. H. Gregg Lewis: Perhaps the Father of Modern Labor Economics. IZA Discussion Paper No. 13551, July 2020.

__________________________

Four page handwritten letter by H. Gregg Lewis to T. W. Schultz
(undated, early 1950s)

PRIVATE

To: T. W. Schultz
From: H. G. Lewis

Some time before the end of this quarter I’d like to sit down with you for an unrushed hour or so to discuss some problems, personal ones, and to receive your counsel.

What has brought the discussion “to a head” is my wish to experiment teaching labor economics along the “laboratory” lines I sketched in an earlier memorandum. (I submit a proposal to that end below.) However, I think there is little virtue and, perhaps, much painful effort in conducting such an experiment unless I have reasonable prospects of continuing the experiment beyond next year. And that has raised the whole question of my future at the University. The problem is not mainly my lack of tenure or the recent freeze on tenure appointments, though these are not irrelevant. Indeed, the purpose of this discussion is not to raise the issue of the Department’s assessment of my work, but my own assessment of myself and what is good for me.

It is difficult to convey to you what the nature of my problem is, since I’m not sure of it myself. In substance it is in [illegible word] aspects loss of self-confidence, demoralization and high tension.

Prior to 1945, I was full of confidence, though I think never very cocky or very self-assured. But in the post-war years my confidence has been continuously slipping. In the last two years particularly, I have felt demoralized, incompetent as an economist, unprepared to say or to write anything that I felt could stand the test of critical examination. Altogether it seems up to an estimate that I’m really [new page] [first word lost/truncated through stapling] … the Department. (My colleagues have been generous to me in attributing my low productivity to Departmental “busy” work. Though I sometimes feel “burdened” by that “busy” work, it’s not the real reason for my low output.)

The demoralization has not been [illegible word] intervals [illegible word] confidence returned. Indeed I do not really feel that I am a shame to the profession, though, I’m not ready to belong in the company of my Chicago colleagues.

I do not know quite what it is that has put me in this unproductive state of mind. Part of it is surely a better realization of my own worth. And sometimes, I attribute much of the trouble to an environment of colleagues who are, on my view, my own superiors. I have learned much from them and stand to learn more if, I should stay. Furthermore, I’m not at all certain that my morale would be improved by a change of environment.

If, I were to stay, I should like to begin an experiment next year (Winter and Spring quarters) with a “laboratory in labor economics.” Although, I’m less enthusiastic about the idea than I was several weeks ago, I still want to give the experiment a good try. (My loss of enthusiasm stems from the fairly cool reception the idea has had from several of my colleagues. They fear[?] that though the laboratory may be unctuous[?] for students, it will prevent its supervisor from doing his own productive research.)

In its negative aspect the proposal involves releasing me from my present duties. Given somewhat smaller enrollment next year, the dropping of a section of Econ 209 and one of Soc. Sci. 200A would not require funds for replacement teaching. Relieving me of an assortment of busy work distractions is [new page] another matter. I am not confident that I could give the laboratory a fair trial while carrying on these busy activities. At the same time I do not want these activities added to those my colleagues already carry. Some replacement funds — from the Ford grant — appear to be necessary therefore.

On the positive side, I would replace these duties with full-time devotion intimate teaching of a few (a half-dozen or so) students who have reached the A.M. level and beyond. I would plan to be engaged with the students, heavily in research. The students admitted to the laboratory would commit themselves to full-time work in it for at least two consecutive quarters. (They would receive their instruction by example, by reading and research and by intimate conferences with their fellows including their supervisor. Progress would be tested by oral and written examinations, papers, and reports. The laboratory would be open to students who had “completed” their theory training and who [illegible word] to do supervised reading and research in labor economics.

The laboratory would make positive demands for resources at the very minimum for desk and conference space for the students and some clerical aid. It seems desirable to me also to provide subsidies of at least tuition to the student members in order to provide an incentive for them to remain in school while doing research. In addition, I should like to bring to the laboratory at least one more mature[?] young economist for a year of research.

In summary the following are the resource demands of the laboratory:

[new page]

  1. Some replacement funds to provide for the services from which I would be released
  2. Desk and conference space for the laboratory and some typing assistance from Social Science typing resources
  3. Six tuition scholarships
  4. A research assistant for three quarters at a negotiated salary of some $4000 to $5,000

I have not made a request for funds for this purpose from the [illegible word, beginning with “D”] since these are matters that go beyond my own private[?] interest.

 

Source: The University of Chicago Archives. Department of Economics. Records. Box 41, Folder 1.

__________________________

Typed memo regarding training graduate students as “scientific craftsmen”

[Penciled note] From Gregg Lewis

I have been discomfited for some time by the belief that graduate faculties of economics generally are neglecting their responsibilities for making economics an effective science and for training their students as scientific craftsmen. I think we do as well as can be expected as moral philosophers and teachers of moral philosophy. Some of us—Knight is our shining example—do exceedingly well indeed. But most of us and most of our students are not made of the stuff that makes for good moral philosophers. Nevertheless, we expend a large part of our energies in that direction and encourage our students to imitate us. This is clearly a misfortune for economic science, and probably also for moral philosophy, if the Knight-Gresham Law of Talk is correct.

Meanwhile, economics as a science languishes. Most of us cultivate the whole field of economic ideas indiscriminately, the useless and misleading along with the useful. And we plant new ideas with the same nice regard for the weeds among them. Thus, each new generation of economists faces a more and more formidable task of weeding. The weeds become more abundant, their roots deeper.

We are not in want of good reasons for making a science of economics. True, the problems of economic planning that are surely the central ones for economic science do have moral content. And, unfortunately it is easy to make practically every controversy on economic policy sound as though it turned solely on a question of morals. The plain fact of the matter, however, is that the really hard core of our disagreements is not in the differences of moral beliefs but in differences of beliefs about economic facts.

That many of us have no real capacity for moral philosophy of course does not mean that we are prepared to be good scientists. Most of us, even if your spirits are willing, will have to struggle hard to overcome our slatternly research habits and to learn scientific skills and “instincts of workmanship.” But that is no excuse for making the effort. For unless we do, our students will be as ill-prepared as we are.

The problem of building a science, of course will not be solved merely by a formal reorganization of graduate instruction. But I think reorganization will help. The example which has guided the proposed reorganization I set forth below is the experimental laboratory of the natural sciences.

“Each professor—whether of money and banking, business cycles, public finance, or what not—will have his own laboratory. He will have one or two assistants who would share responsibility for the laboratory, and other assistants needed. The students (doctoral candidates) in a certain subject will get their training in the laboratory, by working on some project. The individual assignments will be of limited scope, but will be the function of the professor in charge to see that they fit together. The projects will grow out of the research program of the laboratory and will be supervised closely.
There would be no regimentation of the laboratory directors, any more than there is of professors in a well-run university.*
[footnote] *From a letter written by Arthur F. Burns who suggested the idea to me.

It would not be mandatory for any professor to direct such a laboratory, but if he chose to do so, he would be relieved largely from other duties and would be responsible for conducting the affairs of the laboratory continuously and full time. Nor would graduate students in all fields be required (for the Ph.D. degree) to participate in a laboratory project. Those who elected to do so, however, would commit themselves full-time for a period of something like an academic year.

Establishment of such laboratories by a considerable proportion of our faculty would call for a reduction of our student load per faculty member. This can be accomplished in substantial part I think by drastically reducing the number of students who plan to have the A.M. their terminal degree. And this is something I favor, reorganization or not.

Space problems are sure to arise but I do not think they need to be nor will prove to be insoluble.

THE MAIN FEATURES OF THE PROPOSAL

  1. The proposed program of graduate study, I believe, does not conflict in any way with Divisional degree requirements and hence would require no special dispensation by Divisional authorities.
  2. All candidates for the A.M. and Ph.D. degrees normally would obtain the Master’s Degree, after three or four quarters (beyond the four-year A.B.) of full-time participation in lecture courses, and by a route fairly similar to that of our present “Alternative” Master’s degree. The Master’s thesis would be dispensed with, the Master’s degree treated as an undergraduate or non-research degree, and students interested only in the A.M. degree discouraged from applying for admission.
    The obtaining of the Master’s degree would be the principle requirement for admission to graduate study.
  3. Faculty members would be given the free choice of devoting their scholastic energies as most of them do now or of conducting the kind of laboratory described above.
  4. Students admitted to graduate study for the Ph.D. degree would have two alternatives open to them.
    1. Taking graduate courses as they do now principally in “non-laboratory” fields, leading to a preliminary examination or examinations and the satisfaction of “distribution” requirements.
    2. Participating full-time for three quarters in a laboratory leading to the preparation of a paper or papers which would be a prerequisite for admission to Ph.D. candidacy.
  5. The recently passed procedure for admission, writing of thesis, and final Ph.D. examination would not be changed.

 

THE PROPOSED DEGREE REQUIREMENTS:

  1. For the A.M. Degree:
    1. The Divisional requirements
    2. The qualifying examination covering the subject matter of Economics 209, 211 or Social Science 200A, 220 or 222, 230.
    3. The Field Examinations: (Required of all candidates)
      1. Economic Principles: (Required of all candidates)
        This examination would be essentially the same as the present Ph.D. “Theory” prelim, including monetary theory. In terms of present courses, preparation for the examination normally would mean taking the following courses: 300A, 300B, 302, 330, 335.
      2. Statistics: (Required of all candidates)
        Essentially the present prelim covering 311, 312, 313 or 316 or equivalents.
    4. Economics electives: Course credit or examination in a balance of courses sufficient to bring the total registration in Economics to 15 courses. Normally the balance would amount to four courses.
  2. For Admission to Graduate Study:
    1. The A.M. degree above or its equivalent.
    2. Satisfaction of the high level language requirement
  3. Program of Graduate Study
    1. Three quarters of full-time residence in an economics laboratory leading to a paper or papers approved by the laboratory director or
    2. Passing a preliminary examination in a third field (a field other than Principles or Statistics) and satisfaction of the distribution requirement. Normally this would require a full academic year.

Source: The University of Chicago Archives. Department of Economics. Records. Box 41, Folder 1.

Images:  University of Chicago Photographic Archive, H. Gregg Lewis [apf1-03861] and T. W. Schultz [apf1-07479], Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.