Frank W. Taussig’s last time teaching the graduate theory course, Economics 11, was in the Fall Semester of 1934. Joseph Schumpeter took over the second half of the course for the Spring Semester of 1935. In Schumpeter’s papers are 3 pages of Taussig’s handwritten notes and carbon copies of reading lists. Note: the folder where the material is found is labelled “Ec 11 Fall 1935” but material from 1934-35 is in it as well.
ECONOMICS 11, FALL SEMESTER 1934
_________________
[handwritten notes by F. W. Taussig, cf. initials in letter June 9, 1914 to Hunnewell in Lowell Papers, Box 14 Folder 403]
Economics 11 — 1934-35
Topics taken up by F.W.T. [Taussig], in order
- Ricardo, Mill—Theory of Value + Distribution
- “Labor Theory” as modified by non-competing Groups + Social Stratification
- Temporary Equil of S. + D.—inflow of goods to market from an existing stock
- Equil. of S. + D. for longer period.
a) Marshall 2nd period—inflow from existing plant
b) “ 3rd period—inflow from changing plant - External + Internal Economies—M’s [Marshall’s] 4th period
- Quasi-Rent
Agricultural + Urban Rent - Profits
- Clark—B.B. [Böhm-Bawerk]
- Consumer’s Surplus.
Topics not taken up
Theory of Monopoly Price
Austrian Theory of Value
_________________
[handwritten notes by F. W. Taussig]
(1
Ec 11 — ‘34-35
I
Ricardo, chs I Value (omitting the discussion of Adam Smith)
“ II Rent, III Rent of Mines
“ IV
“ V Wages
“ VI Profits
Mill, Bk III chs I, III[,] IV
(Value, omitting ch II, which was considered later in connection with Marshall)
Mill Bk II, ch. XVI ; Bk I, ch. XII (Rent)
“ Bk II, ch XI ; XIII, §§3-4 Wages
“ Bk II, ch XV ; Profits
“ Bk IV, chs IV[,] V, VI ; Profits to a minimum
_________________
[handwritten notes by F. W. Taussig]
(2
Reading List—Econ 11 — 1934-35
Non-competing Groups + Labor Theory of Value
Cairnes[,] Leading Principles. P+I, ch. III
Mill[,] Bk II, ch XIV (Differences of wages), cf. Adam Smith, Bk I, ch. X
Taussig, Principles, ch 47, 48
Marshall, Book VI chs IV, V; Book IV, ch 6
Cf. Marshall second edition, Bk VI, ch I, §3 (p. 557-558)
_________________
[handwritten addition] 3)
[Typed table of readings that is nearly identical to Wolfgang Stolper’s hand-written reading list in his course notes from the Fall Semester 1934. Cf. Duke University, Rubenstein Rare Book & Manuscript Library. Wolfgang F. Stolper Papers, Box 19, Notebook: Taussig Ec 11 Theory, 1934-35]
Economics 11
1934-35
| Demand, Market Value |
Mill, Book III, chs. 1, 2. Marshall, Book III, ch. 3; Book V, chs. 1, 2. Taussig, Quarterly Journal of Economics, May 1921 |
| Normal Value |
Mill, Book III, chs. 3, 4. Marshall, Book V, chs. 3, 4, 5. Viner, Zeitschrift f. Nationaloekonomie, Sept. 1931, vol. I Taussig, Quarterly Journal of Economics, February 1919. Marshall, Appendix H |
| Quasi Rent |
Marshall, Book V, ch. 8; Book V, ch. 9. Fetter, Quarterly Journal of Economics, May 1901 (vol. 15). |
| Increasing Returns |
Marshall, Book V, ch. 12; Book IV, ch. 9, §7; ch. 10, 13. |
| Agricultural Rent, Urban Rent |
Marshall, Book IV, chs. 2, 3; Book V, ch. 10, (omit §§4, 5); Book VI, ch. 9; Book V, ch. 11. Ely, Outlines, 5th ed., ch. 22. |
| Profits | Mill, Book II, ch. 15. Marshall, Book IV, chs. 12, 13; Book VI, chs. 7, 8. Knight, “Risk, Uncertainty and Profits”, chs. 9, 10. Ely, Outlines, ch. 24.L. Robbins, The Representative Firm, Economic Journal (1928) |
| [handwritten addition] | Marshall Bk V, ch. 10 §2 (settlers in a new country); Bk VI, ch V, §7 (rare natural abilities) |
| [handwritten addition] | Schumpeter—Theory of Ec. Development ch. IV |
_________________
[Typed carbon list]
[handwritten addition] 4)
Economics 11
1934-35
Reading
I
Böhm-Bawerk, Positive Theory of Capital
Book II, chs. 1, 2, 4, 6
Book V, chs. 1, 2, 3, 4, 5
Book VI, chs. 1 (pp. 285-286), 2, 4, 5, 6
Book VII, chs. 1, 2, 5
II
Clark, Distribution of Wealth
chs. 6, 7, 8, 9, 20
chs. 11, 12, 13, 21
Marshall, Book IV, ch. 7 (“The Growth of Wealth”—Capital, Saving etc); Book VI, chs. 1, 2
_________________
[Final Exam Economics 11, Fall Semester 1934]
1934-35
HARVARD UNIVERSITY
ECONOMICS 11
One question may be omitted. Arrange your answers in the order of the questions.
- “Suppose that society is divided into a number of horizontal grades, each of which is recruited from the children of its own members; and each of which has its own standard of comfort, and increases in numbers rapidly when the earnings to be got in it rise above, and shrinks rapidly when they fall below that standard. Suppose, then, that parents can bring up their children to any trade in their own grade, but cannot easily raise them above it and will not consent to sink them below it….”
Suppose also that there is free competition as regards the earnings of capital.
On these suppositions what would be the relation between
(a) the values of commodities and their “real cost”
(b) the values of commodities and their money costs;
(c) the values of commodities and their supply prices?
- “Internal economies of large-scale production are primarily a long-run phenomenon, dependent upon appropriate adjustment of scale of plant to each successive output. They should not be confused with the economies resulting from ‘spreading of overhead.’” Why or why not to be thus confused?
“Internal economies of large-scale production are independent of the size of output of the industry as a whole, and may be accruing to a particular concern whose output is increasing at the same time that the output of the industry as a whole is undergoing a decline.” Why or why not?
- Does quasi-rent have the same meaning in the following passages?
(a) “The quasi-rent of farm-buildings.”
(b) “When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labor invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different; in his case the greater part is quasi-rent.”
(c) “In relation to normal value the earnings of high ability are to one regarded as a quasi-rent rather than as a rent proper.”
- Is it fatal to the conception of consumers’ surplus to admit:
(a) that differences in income make it impossible to measure satisfactions;
(b) that each unit of a homogeneous supply yields ipso facto the same satisfaction as every other unit;
(c) that the satisfaction indicated by the high price paid for an article having “prestige value” will disappear when the article becomes cheap
- Does “capital,” as distinguished from “capital goods,” serve to synchronize the effort of labor with the reward for labor? If so, how? If not, why not?
- Explain the distinctions
(a) between the intensive and the extensive margins of cultivation for land;
(b) the intensive and the extensive zones of indifference in the application of labor;
(c) the marginal product of labor and the product of marginal labor.
State summarily your opinion of the usefulness of the distinctions as tools of analysis.
Mid-Year. 1935.
No. 37
Source: Harvard University Archives. Joseph Schumpeter Papers. HUC (FP) – 4.62
Box 9 (Lecture Notes), Folder “Ec11 Fall 1935”.