Just as the Harvard economics department saw it fit to offer a course on the economic aspects of war at the start of the Second World War, there was a course on the economics of mobilization and war at the time of the Korean War taught by Seymour Harris, who had organized the earlier departmental course on war economics in 1940. Enrollment numbers for courses taught during the academic year 1951-52 were not included in the Harvard College Report of the President, so I am unable to include that information in this post. However, we have the course catalogue description, course reading list, and the final examination as transcribed below.
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Course Description
Economics 120. Economics of Mobilization and War
Half-course (spring term). Mon., Wed., and (at the pleasure of the instructor) Fri., at 12. Professor Harris.
This course deals with the following problems on both a historical and current basis: the allocation of resources; income policies; the financing problems; the avoidance of inflation; the incidence of inflation; the relevance of controls; international aspects.
Source: Final Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences During 1951-52. Official Register of Harvard University, Vol. XLVIII, No. 21 (September 10, 1951) p. 77.
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Course Syllabus and Readings
Spring Term 1951-52
Economics 120
Economics of Mobilization and War
*Books to be bought
I. Introduction (1 week)
Nature of the problem: mobilizations of World War II and the 1950’s
Three models: peacetime economy, mobilization economy, war economy
Real costs and money costs
Prospects for the civilian standard of living
Reading
*1. Harris: Economics of Mobilization and Inflation, Ch. 1 (pp. 3-25)
2. Keynes: How to Pay for the War, Chs. 1, 2 (pp. 1-12)
3. Hart: Defense Without Inflation, Ch. 9 (pp. 165-185)
4. Pigou: The Political Economy of War, Ch. IV (pp. 47-55)
II. The Problem in Real Terms: Optimal Division of Resources (3 weeks)
Allocation of resources, manpower, and facilities; changing nature of output
International aspects
Production scheduling; “bottlenecks”
Administration of military procurement
Reading
1. Pigou: The Political Economy of War, Ch. III (pp. 29-47)
2. Harris: Economics of Mobilization and Inflation, Chs. 2-6 (pp. 25-85)
3. Office of Defense Mobilization: Three Keys to Strength (Third Quarterly Report to the President) or subsequent reports.
*4. Chandler and Wallace: Economic Mobilization and Stabilization, Chs. 4, 5 (pp. 91-136)
III. The Problem in Money Terms: Adequate Funds Without Runaway Inflation (3 weeks)
Financing the War; the “inflationary gap”
Why is inflation harmful? Uneven incidence of inflation
The Fiscal Policy attack on inflation
The Direct Controls attack on inflation
Interrelatedness of Fiscal Policy and Direct Controls
Reading
1. Keynes: How to Pay for the War, Ch. 2 (above)
2. Pigou: The political Economy of War, Chs. VII, VIII (pp. 72-94)
3. Harris: Economics of Mobilization and Inflation, Chs. 7-10, 18, 19, 22 (pp. 85-119; 197-214; 245-256)
4. Hart: Defense Without Inflation, Chs. 1, 4 (pp. 3-18, 59-77)
5. Galbraith: A Theory of Price Control, Chs. 4, 5, 6, 7, 8 (pp. 28-75)
6. Scitovsky, Shaw and Tarshis: Mobilizing Resources for War, Ch. 2 (pp. 101-144) and pp. 145-149 of Ch. 3
7. Chandler and Wallace: Economic Mobilization and Stabilization, pp. 34-59 and Ch. 26 (pp. 569-592)
8. Harris: Price and Related Controls in the United States, Ch. II (pp. 29-38)
IV. Fiscal Policy: Its Implementation and Effects (3 weeks)
Funds for financing mobilization: taxes or loans?
Reducing aggregate demand: taxes, savings, or deferred payment?
Burden of the public debt
Reading
1. Pigou: The Political Economy of War, Chs. VII VIII (above)
2. Harris: Economics of Mobilization and Inflation, Chs. 11-17, Chs. 22-24 (pp. 119-197, 245-286)
Chandler and Wallace: Economic Mobilization and Stabilization, Part III and Ch. 15 (pp. 180-272, 273-315)
4. Keynes: How to Pay for the War, Ch. V (pp. 27-34)
V. Direct Controls: Principles and Techniques (3 weeks)
Allocation of resources: priorities
Price control, rationing, wage control, rent control
Costs, prices, subsidies, supplies
International Aspects
Reading
1. Hart: Defense Without Inflation, Ch. 5 (pp. 78-97)
2. Harris: Price and related Controls in the United States, Chs. III-VIII, XI, XII, XVIII, XXI, XXII, XXV, XXVII
3. Galbraith: A Theory of Price Control, Ch. 8 (above)
4. Harris: Economics of Mobilization and Inflation: Ch. 20, 21 (pp. 214-245)
VI. Summary and Alternative Policies
Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 5, Folder “Economics, 1951-1952 (1 of 2)”.
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Reading Period Assignment
HARVARD UNIVERSITY
Department of Economics
Reading Period Assignments
May 5 – May 24, 1952
Economics 120:
Bureau of the Budget: THE U.S. AT WAR. Chs. 5 through 7, 9 through 12, 15 and 16.
D. N. Chester (Ed.): LESSONS OF THE BRITISH WAR ECONOMY.
Baruch: AMERICAN INDUSTRY IN THE WAR, First Annual Report of the Activities of the Joint Committee on Defense Production. Read 250 pages dealing primarily with stabilization agencies. (Superintendent of Documents)
Joint Committee on the Economic Report: MONETARY POLICY AND MANAGEMENT OF THE PUBLIC DEBT, Part I. Read either pp. 1-194 or 207-492.
Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1), Box 5, Folder “Economics, 1951-1952 (1 of 2)”.
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Final Examination
May 1952
1951-52
HARVARD UNIVERSITY
ECONOMICS 120
Instructions: Answer both questions in Part I, and any two questions in Part II.
Please write legibly!
Part I
- (a) Summarize the “disequilibrium system” and the “pay-as-you-go” approaches to stabilization. What are the advantages and disadvantages of each as applied to the current mobilization period? (20 points)
(b) Most practicable programs involve some combination of direct and indirect controls. Discuss the theoretical bases for monetary, fiscal, and direct controls, respectively, and explain clearly the theoretical interrelatedness of these measures. (20 points) - Write a critical summary of some phases of your reading period assignment. (10 points)
Part II
- (a) Indicate briefly—by chart, if you prefer—the organizational hierarchy of the present mobilization and stabilization agencies and summarize briefly the function of each agency. (5 points)
(b) Summarize the economic issues of the current Steel Case. Include in your answer such points as the WSB recommendations, the criteria for the recommendations, controversial issues, etc. (20 points) - Define or identify and then discuss the significance of five (5) of the following: (5 points each)
(a) Low end problem
(b) Formula pricing
(c) Controlled Materials Plan
(d) Little Steel Formula
(e) Differential pricing
(f) Margin of tolerance and the Inflationary Gap
(g) Simplification programs
(h) Priority inflation
(i) Export controls - Outline the major economic institutions of the ideal “free enterprise” system and indicate what functions they perform. How are these functions carried out in a war economy such as the current one? (25 points)
- Discuss the problems which mobilization brings to the following areas:
(a) Agriculture (5 points)
(b) National Debt Management (10 points)
(c) Welfare Expenditures (10 points)
Source: Harvard University Archives. Final Examinations, 1853-2001. Box 27. Faculty of Arts and Sciences. Papers Printed for Final Examinations: History, History of Religions, …, Economics, …, Air Sciences, Naval Science. June, 1952.
Image Source: Seymour Harris in Harvard College, Class Album 1957, p. 67.