Materials for the undergraduate course “Business Organization and Control” taught by Sidney Alexander in 1948-49 has been transcribed and posted earlier. The course was taught the following year by John Kenneth Galbraith and others. Below you will find enrollment data followed by transcriptions of the syllabi for both semesters along with the mid-year and final examinations for the course.
_______________________
Course Enrollment
[Economics] 161 (formerly Economics 61a and 62b). Business Organization and Control. (Full Co.) Dr. Galbraith
(F) Total 179: 2 Graduates, 61 Seniors, 75 Juniors, 32 Sophomores, 1 Freshman, 8 Radcliffe.
(Sp) Total 160: 2 Graduates, 56 Seniors, 70 Juniors, 24 Sophomores, 7 Radcliffe, 1 Other.
Source: Harvard University. Report of the President of Harvard College and Reports of the Departments for 1949-59, p. 73.
_______________________
[Fall Term, 1949-50]
Economics 161
Business Organization and Control
Dr. Galbraith
|
Date |
Topic | Lecturer |
Reading |
| Sept. 28 | Preview | Galbraith | Bain, Ch. 1,2 (omitting pp. 26-41), 4, 5, 6, 8.
TNEC No. 21, pp. 20-48, 113-121. |
| Sept. 30 | Applied Theory of Markets | Galbraith | |
| Oct. 3 |
“ |
Galbraith | |
| Oct. 5 |
“ |
Galbraith | |
| Oct. 7 | Section | ||
| Oct. 10 | Section | ||
| Oct. 12 | HOLIDAY | ||
| Oct. 14 | Forms of Business Enterprise | Gordon | Guthmann & Dougall, Chapter 2 |
| Oct. 17 24 | The Corporation: Origin and Legal Characteristics | Gordon | Buchanan, Ch. 3; Berle & Means, Book II, Ch. 1; Dewing, Book I, Ch. 1-2. |
| Oct. 19 26 |
“ |
Gordon | |
| Oct. 21 28 | Section | ||
| Oct. 24 31 | Concentration & Market Organization: The Role and peration of the Large Corporation | Galbraith | Gordon, Chapters 2, 4, 5. Berle and Means, Book I, Ch. 1; Book IV, Chapters 1-4. |
| Oct. 26 Nov. 2 |
“ |
Galbraith | |
| Oct. 28 Nov. 4 |
Section | ||
| Oct. 31 Nov. 7 |
Concentration & Market Organization: Holding companies and interest groups | Galbraith | Purdy, Chapter 7. Structure of the American Economy, Part I, Appendix 13 |
| Nov. 2 Nov. 9 |
Concentration & Market Organization: Trade Associations | Gordon | TNEC No. 18, pp. 45-67 TNEC No. 21, pp. 234-258 |
| Nov. 4
Nov. 11 |
Section |
Bain, Joe S., Pricing, Distribution, and Employment, 1948.
U.S., Temporary National Economic Committee Monographs:
No. 18, Trade Association Survey;
No. 21, Competition & Monopoly in American Industry.
Guthmann, H. G., & Dougall, H. E., Corporate Financial Policy, 1948.
Buchanan, N. S., The Economics of Corporate Enterprise.
Berle, A. A., & Means, G. C., The Modern Corporation and Private Property, 1932.
Dewing, A. S., Financial Policy of Corporations, 1941, 2-volume edition.
Gordon, R. A., Business Leadership in the Large Corporation, 1945.
Purdy, H. L., Lindahl, M.L., and Carter, W. A., Corporate Concentration & Public Policy, 1942.
U.S., National Resources Committee, Structure of the American Economy, Part I, “Basic Characteristics.
_______________________
[Fall Term (cont.), 1949-50]
Economics 161
Business Organization and Control
Messrs. Galbraith and Gordon
|
Topic |
Lecturer |
Reading |
|
| November 14 | Price Leadership and Market Sharing | Gordon | Burns, Ch. III (ex. pp. 118-140), and Ch. IV. |
| November 16 | Patents and Trademarks | Gordon | T.N.E.C. Monograph No. 21, pp. 158-165; Edwards, pp. 216-248. |
| November 18 | Section | ||
| November 21 | Advertising | Galbraith | Burns, Ch. VIII |
| November 23 | Price Discrimination | Gordon | Boulding, pp. 533-43 |
| November 25 | Section | ||
| November 28 | Basing Point System—Exposition | Galbraith | Machlup, Ch. 1 (ex. Appendix) and Ch. 3;
Kaysen, “Basing Point Pricing and Public Policy” |
| November 30 | Basing Point System—Consequences | Kaysen | |
| December 2 | Section | ||
| December 5 | Economic Norms of Public Policy | Duesenberry | Hansen, Fiscal Policy and Business Cycles, Ch. XV |
| December 7 |
“ |
Duesenberry | |
| December 9 | Section | Galbraith, Essay on Monopoly and Concentration of Economic Power in Ellis, Review of Contemporary Economics | |
| December 12 | Economic Norms of Public Policy | Duesenberry | |
| December 14 | Promoting Competition: The Anti Trust Laws | Gordon | Purdy et al., Chs. 16, 17, 18 (omitting pp. 354-360), 20 (omitting pp. 393-401), 28;
Adelman, “Effective Competition and the Anti Trust Laws”; |
| December 16 | Section | ||
| December 19 | Promoting Competition: The Anti Trust laws | ||
| December 22 |
“ |
Adelman, M. A., “Effective Competition and the Anti Trust Laws,” M.I.T., Publications in the Social Sciences, Series No. 1, Reprint from Harvard Law Review, Sept. 1948.
Boulding, Kenneth, Economic Analysis, Revised Edition.
Burns, A. F., The Decline of Competition, 1936.
Edwards, Corwin, Maintaining Competition, 1949.
Kaysen, Carl, “Basing Point Pricing and Public Policy,” Q.J.E., August, 1949, pp. 289-314.
Machlup, Fritz, The Basing Point System, 1949.
Mason, Edward S., “The Current Status of the Monopoly Problem in the U.S.,” Harvard Law Review, June, 1949, pp. 1265-1285.
Purdy, H. L., Lindahl, M. L., and Carter, W. A., Corporate Concentration & Public Policy, 1942.
U.S., T.N.E.C. Monograph No. 21, Competition and Monopoly in American Industry, 1940.
Hansen, Alvin, Fiscal Policy and Business Cycles, 1941, First Edition.
Ellis, Howard, Review of Contemporary Economics, 1948.
_______________________
Final Examination, Fall Term 1949-50
1949-50
HARVARD UNIVERSITY
ECONOMICS 161
I.
(one hour)
Required
- A book published a couple of years ago entitled The American Individual Enterprise System, has the following to say about “the meaning of competition”;
“How a seller chooses to exercise his freedom, as long as he is independent, does not furnish a test of competition. The only true test, and the basic distinguishing feature of competition, is whether there are at least two suppliers of a market who make independent decisions on the prices and conditions at which they will offer their goods and services.”
Using the word “competition” in this sense, the book’s authors stat that “competition serves the public in the following ways”:
“It tends to assure that goods and services will be produced and distributed at the lowest possible cost.
“It tends to assure that profits will be held to the minimum.
“It tends to assure that the energy and raw materials and productive capacity of the nation will be used for providing those goods and services which the public wants, and in proportion to the relative demands of the public.
“It assures freedom of opportunity. Anyone at any time, if he has the necessary capital, can enter any line of business he desires.”
Questions:
(a) Do you concur in this definition of competition? Why or why not?
(b) Would an economic system which is “competitive” in the sense of the above quotation necessarily produce the results which the authors mention? Consider in turn each of the “results” mentioned above. Be specific, and make certain that you explain each step in your reasoning.
II.
(Seventy-five minutes)
Answer any three of the five.
- Give a concise, clear explanation of the mechanics of a multiple-basing point pricing using graphs if you wish.
- Under what circumstances and why are business firms likely to prefer non-price to price competition? Define your terms precisely.
- In what ways may it be argued that the American patent system is a stimulus and in what ways a deterrent, to invention and to realized technical progress in American industry?
- What is price discrimination? Outline a set of conditions under which discriminatory pricing operates to the advantage of buyers.
- State definitely but concisely the way in which each of the following cases affected the development of antitrust law.
C. Knight Case
Standard Oil Case
U. S. Steel Case
Aluminum Case
III.
(Forty-five minutes)
Required.
- Schumpeter and Clark appear to agree in advocating (or condoning) certain restraints on competition. Develop fully and discuss the lines of argument by which they arrive at their respective conclusions.
Mid-Year. January 1950.
_______________________
[Spring Term, 1949-50]
Economics 161
Business Organization and Control
Professor Galbraith and Mr. Gordon
|
Subject |
Lecturer |
Reading |
|
| Feb. 8 | Promoting Competition: Cartel Policy | Gordon | Mason, Controlling World Trade, Ch. 1, 2. |
| Feb. 10 | Promoting Competition: The Recent Antitrust Cases | Gordon | Oppenheim, Cases on Federal Antitrust Laws, Ch. 5. Nicholls, “The Tobacco Case of 1946,” American Economic Review, May 1949, pp. 284-96. |
| Feb. 13 | Regulating Competition: Retail Trade and Regulation | Galbraith | TNEC Monograph 35, pp. 5-14, 145-160. Adelman, “The A & P Case,” Quarterly Journal of Economics, May 1949. |
| Feb. 15 | Regulating Competition: Retail Trade and Regulation | Galbraith | |
| Feb. 17 | Section | ||
| Feb. 20 | Limiting Competition: Agriculture | Galbraith | Black, Parity, Parity, Parity, Ch. 5, 20, 21. Schultz, Production and Welfare of Agriculture, Ch. 4, 5, 8, 9, 12, 13, 15. |
| Feb. 22 | HOLIDAY | ||
| Feb. 24 | Limiting Competition: Agriculture | Galbraith | |
| Feb. 27 | Limiting Competition: Agriculture | Galbraith | |
| Mar. 1 | Regulated Monopoly: The Public Utility Concept | Gordon | Lyon, Abramson et al, Government and Economic Life, Vol. II, Ch. 21. |
| Mar. 3 | Section | ||
| Mar. 6 | Regulated Monopoly: Power and Transport | Gordon | |
| Mar. 8 | Regulated Monopoly: Power and Transport | Gordon | Locklin, Economics of Transportation, Ch. VIII, XV, XVI. |
| Mar. 10 | Section | ||
| Mar. 13 | Regulated Monopoly: Power and Transport | Gordon | |
| Mar. 15 | Corporate Financial Structure | Gordon | Dewing, Financial Policy of Corporations, Bk. I, Ch. 4 to p. 83, Ch. 7, 8, 9 to p. 218, and pp. 230-42; Bk. III, Ch. 1, 2. Merrill, Lynch, How to Read a Financial Report (entire pamphlet) |
| Mar. 17 | Section | ||
| Mar. 20 | Corporate Financial Structure | Gordon | |
| Mar. 22 | Corporate Financial Structure | Gordon | |
| Mar. 24 | Section | ||
| Mar. 27 | Regulation of Securities and Markets | Gordon | Stein, Government and the Investor, Ch. 2, 3, 4, 6. |
| Mar. 29 | Regulation of Securities and Markets | Gordon | |
| Mar. 31 | Section | ||
| Recess from April 2 through 9 | |||
| Apr. 10 | Conservation: Forest Products | Nixon | Jensen, Lumber and Labor, Ch. 1,2. |
| Apr. 12 | Conservation: Oil and Gas | Manne | Rostow, A National Policy for the Oil Industry, Ch. 1-9, 13-15. |
| Apr. 14 | Section | ||
| Apr. 17 | Conservation: Oil and Gas | Manne | |
| Apr. 19 | HOLIDAY | ||
| Apr. 21 | Public Development: Housing | Galbraith | Fortune Magazine: The Industry Capitalism Forgot, August 1947, & Editorial, September 1947.
TNEC Monograph #8, Towards More Housing, Ch. IV, V, IX. |
| Apr. 24 | Public Development: Housing | Galbraith | |
| Apr. 26 | Economic Mobilization | Galbraith | Galbraith, “The Disequilibrium System,” American Economic Review, 1947.
Johnson, G. G., Economic Stabilization Program. |
| Apr. 28 | Section | ||
| May 1 | Economic Mobilization | Galbraith | |
| May 3 | Reconciliation of Policy | Galbraith | |
| May 5 | Summary | Galbraith | |
| Reading Period begins May 8 | |||
Mason, Edward S., Controlling World Trade, 1946.
Oppenehim, S. C., Cases on Federal Antitrust Laws.
Nicholls, W. H., “The Tobacco Case of 1946” in American Economic Review, May 1949, pp. 284-96.
Lyon, Abramson, et al, Government and Economic Life 1940.
Dewing, Arthur S., Financial Policy of Corporations, 1941, 2-volume edition.
Merrill, Lynch, Pierce, Fenner, and Beane, How to Read a Financial Report (pamphlet).
Stein, Emanuel, Government and the Investor.
Locklin, D. Philip, Economics of Transportation, 1947.
TNEC Monograph #8, Toward More Housing.
TNEC Monograph #35, Large-Scale Organization in the Food Industries.
Adelman, M. A., “The A & P Case. A Study in Applied Economic Theory,” Quarterly Journal of Economics, Vol. LXIII, No. 2, May 1949.
Schultz, T. W., Production and Welfare of Agriculture, 1949.
Black, J. D., Parity, Parity, Parity, 1942.
Jensen, Vernon, Lumber and Labor.
Rostow, Eugene V., A National Policy for the Oil Industry, 1947.
Galbraith, J. K., “The Disequilibrium System,” American Economic Review, Vol. XXXVII, #3, June 1947.
Fortune Magazine, “The Industry Capitalism Forgot,” August 1947, “Editorial,” September 1947.
Johnson, G. G., Suggestions for the Development of an Economic Stabilization Program for a War Emergency, National Security Resources Board, Document 47.
_______________________
Economics 161
[Midterm] Examination
April, 1950
- Retailing and agriculture are both industries composed of many small firms. What are the similarities in government policy toward these industries? What are the important differences?
- What were the principal provisions of the Securities Exchange Act of 1934? Discuss briefly in light of the abuses they were designed to remedy.
_______________________
Spring Term, Final Examination
1949-50
HARVARD UNIVERSITY
ECONOMICS 161
I.
(Forty-five minutes)
Required
- The special appeals court, which heard the Alcoa case in 1945, said that Congress, in passing the federal antitrust laws, “was not necessarily actuated by economic motives alone.” “It is possible,” the court said, “because of its indirect social or moral effect, to prefer a system of small producers, each dependent for his success upon his own skill and character, to one in which the great mass of those engaged must accept the direction of a few.”
Does this point of view seem to you to provide a persuasive argument for the fair trade laws, Robinson-Patman Act and the position of the government in the A & P cases? Explain.
II.
(Ninety minutes)
Answer three out of four.
- Explain the importance of the following in relation to public regulation of the petroleum industry:
- The rule of capture.
- The Connally “Hot Oil” Act.
- The Interstate Compact.
- Marginal well Acts.
- Compulsory unit operation.
- What are the Acts of Congress administered by the Securities and Exchange Commission? Outline the principal provisions of any three of them and the ends they were designed to achieve.
- Under what circumstances do you believe a certificate of convenience and necessity should be required for entry into a business? What industries would you add (or delete) from a list where such certificates are required and why?
- “The pricing system is not an appropriate means for stabilizing income from farming over time. To place this burden on the pricing system, as has been done in recent years can only reduce greatly its capacity [for allocating resources between alternative employments in agriculture and between agricultural and non-agricultural enterprise].”
What is the general character of the legislation “of recent years” to which Professor Schultz refers? Do you agree that it has inhibited resource allocation? Does the same objection hold for the Brannan Plan?
III.
(Forty-five minutes)
Required.
- Before signing or vetoing important legislation, the President customarily requests the Bureau of the Budget—or occasionally some other Executive department or agency—to prepare a confidential memorandum setting forth the main features of the proposed legislation, the principal groups favoring and opposing it together with their arguments and motives, a careful statement of the economic consequences of the legislation; and the recommendation to the President, properly defended, as to whether he should accept or veto the legislation.
Would you prepare such a memorandum on the amendments to the Natural Gas Act of 1938 (the Kerr Bill), as passed by the Eighty-first Congress and keeping in mind the following:- That you are asked to pass only on the economic questions posed by the legislation. You are at liberty to ignore any purely legal issues that may have been involved.
- That your concern is solely with the public welfare. You may ignore any political problems which the legislation poses for the President or his party.
- That the President is a busy man and should not be burdened with an unnecessarily long-winded discourse.
(The quality of your memorandum and its economic analysis and argument, not the particular recommendation you make, will be the guiding factor in marking your paper.)
Final. May 1950.
Source: John F. Kennedy Presidential Library, Papers of John Kenneth Galbraith. Box 519, Folder “Economics 161, 1949-50.”
Image: John Kenneth Galbraith in Harvard Class Album 1952.