Tag: Bronfenbrenner

Columbia. Fairy tale by economics PhD alumnus (1953), Thomas Mayer

Post author By Irwin Collier
Post date 2024-01-09

The monetary economist whose methodological contributions will likely be read long after the heated debates about monetarism lie cold in university archives or buried in the footnotes of historians of economics, Thomas Mayer, was born January 18, 1927 in Vienna. His family was able to leave Austria in the late 1930s which gave him the opportunity to go to college (Queens) and graduate school (Columbia) in New York City. This led to a long, distinguished academic career that culminated in a professorship at the University of California, Davis. He died in Berkeley, California June 12, 2015.

This post adds to the subcollection “Funny Business” here at Economics in the Rear-view Mirror that is dedicated to attempts at nominal and real humor by economists. At the time of the writing of the following “Fairy Tale” (est. ca. 1952-53), Thomas Mayer was probably still a doctoral candidate, or perhaps a freshly-minted Ph.D., in economics at Columbia University. Martin Bronfenbrenner thought enough of this little mimeographed paper to have kept it in his files of macroeconomic teaching materials. There is no clue there, when or how he came to have a copy of the paper. In preparing this post, I discovered that only some archival boxes away at Duke’s Economists’ papers archive there is also another copy of the “Fairy Tale” in the Thomas Mayer Papers collection.

In his brief biographical tribute to Thomas Mayer, Kevin Hoover (see below for exact citation) wrote “Tom reported that Keynes’s General Theory was perhaps the first economics book that he read while still in school in England and that he was driven to keep studying economics until he was able to understand the book – a feat that he, unlike many others, claims to have accomplished”. My favorite lines from Hoover are the following:

[Thomas Mayer] was neither a market fundamentalist nor a government romantic, but occupied the ideologically uncomfortable middle: the left thought that he was a monetarist; the right, a Keynesian. He reported having been cast off the monetarist Shadow Open-Market Committee for left-wing deviationism.

__________________________

Tributes to Thomas Mayer

Monetarism and the Methodology of Economics, edited by Kevin D. Hoover and Steven M. Sheffrin (Edward Elgar, 1995) is a collection of 14 original essays in honour of Thomas Mayer focusing on the themes of monetarism, the transmission mechanism for monetary policy, the political economy of monetary policy and the methodology of empirical economics. Contributions by: King Banaian, Mark Blaug, Martin Bronfenbrenner, Richard C.K. Burdekin, Thomas F. Cargill, Milton Friedman, C.A.E. Goodhart, D. Wade Hands, Abraham Hirsch, Kevin D. Hoover, David Laidler, Thomas Mayer, James L. Pierce, Steven M. Sheffrin, Richard J. Sweeney, Thomas D. Willett, Wing Thye Woo.

Hoover, Kevin D. (2015). Thomas Mayer. Journal of Economic Methodology 22 (4):526-527.

__________________________

AER Membership Bio, 1974

Mayer, Thomas, academic; b. Vienna, Austria, 1927. Educ. B.A. Queens Coll., 1948; Ph.D., Columbia U., 1953. Doc. Dis. The Population Argument of the Stagnation Thesis, 1953. Fields 310, 020. Pub. Permanent Income, Wealth and Consumption, 1972; Monetary Policy in the United States, 1968; Intermediate Macroeconomics, 1972. Res. Interpretation of Interest Rate Snap-Back; Explanation of Excess Reserves in 1930’s. Prev. Pos. Vis. Assoc. Prof., U. of Calif., 1961-62, Assoc. Prof., Mich. State U., 1956-61, Asst. Prof. U. of Notre Dame, 1954-56. Cur. Pos. Prof., U. of Calif., since 1962. Address 3054 Buena Vista Way, Berkeley, CA 94708.

Source: American Economic Review (October 1974). Directory of Members, 1974, p. 262.

__________________________

A FAIRY TALE¹

By Anon Ymous²

Long, long ago there lived in a far and distant country a Happy Family. They were the Natural and the Market Rate of Interest. They loved each other dearly, and had two beautiful and good children: Price Level Stability and Full Employment. The parents always stuck together, for they knew that if they should part their children would be lost.

Near their house was a big wood. It was largely unexplored, and in it there lived a fierce Giant with the terrifying name of Central Bank Policy. He was a great, big, strong man. But instead of helping the two parents to keep their children happy, he would often fight with them. He pretended to love their two children dearly, but in reality he loved his own child more. His child had a shock of golden blond hair, and was for that reason known as Goldie Standard. Sometimes this child would get sick, and then her father wanted to separate our happy family. He would try to take the mother, the Market Rate of Interest, into the wood with him to take care of Goldie Standard, and to make her well again. Of course the father, poor Natural Rate of Interest, could not follow. The two sweet children would not have had the care they needed, and would starve. Poor little Full Employment would lose her full, round cheeks, and her sister, Price Level Stability, would feel so weak that she would stumble and fall many times. But Central Bank Policy did not mind this, though he pretended to, for he loved Goldie Standard above anything in the world — even though she was often naughty, and taught little Price Level Stability many naughty tricks like climbing up and down all over the Time Series.

Since the giant Central Bank Policy would have had great difficulty in stealing dear Market Rate of Interest by himself alone, he had a group of supporters called Orthodox Economists. They were on his side, for they thought that if Goldie Standard should die there would be nobody to exercise loving care over him; then, in a fit of temper, he might start to play around with the Printing Press.

One bright day a fair prince from far away arrived in this country. His name was Prince Keynes. He was the son of the ruling house of Cambridge. He saw at once what was going on in the country. Indeed, he did not find this difficult, for he had once read a vague prophecy by a Swede that such a country existed. He soon had Tract the matter down, and decided to help the poor family, but at first he did not quite know how. He studied for a long, long time, writing down his observations in a big diary. So that the giant would not find it, he hid it in a tree (not in a pumpkin [Curator’s note: a clear reference to the “Pumpkin papers” hidden by Whittaker Chambers then revealed in the case of Alger Hiss. Very much in the news 1949-50]), and for this reason it is until this day called “Tree-t’is”. (Sorry!)

Now in watching the animals playing around, especially the bears and the bulls, Prince Keynes got an idea. He built a trap, with a Schedule like a ladder; and if you followed it down you fell into a Liquidity Preference. Now the Giant’s helpers, the Orthodox economists, did not know this, and themselves fell into it, and became All Wet. Then Prince Keynes came up and told them: “I will help you out and will tell you a great Secret, if you will help me to free the poor mother, dear Market Rate of Interest.” They agreed, and so in a low voice he told them: “Always and ever and ever, when the sun setteth and when it rises, in every land and on every sea, S equals I.”

The orthodox economists were very glad to learn this Secret, and led Prince Keynes to the place where the poor mother, dear Market Rate of Interest, was imprisoned. They were the Prince’s friends by now, and went with him wherever he went, always telling each other: S equals I. Then they visited the Giant and taught him a new Canticle our Prince had invented. It went like this:

“To keep the Economy in a boom?³Raise the Propensities — Invest and Consume —
For the rate of interest is but the consequence
Of the amount of money and liquidity preference.
And S = I whatever you say,
Unless you use young Robertson’s “day”.
Under-employment an equilibrium can be
As during the thirties any fool could see.
Wage-cuts can never full employment quite bring;
To be sure that you know it, this ditty I sing.”

The Giant was more or less convinced by this Canticle. And in any event, Goldie Standard had been so naughty that even the lady who lived in Threadneedle Street, and loved her like a mother, did not want to have anything more to do with her.

So the Giant decided to make peace with the family; and he grew to love both children, though he preferred Full Employment to Price Level Stability. Not only did he spend [his] time in keeping the family happy, but he even persuaded an animal which had inhabited the woods with him, called Fish-Call-Policy, to join him in this enterprise. So then all lived happily ever after until the next Depression.

With apologies,⁴Thomas Mayer

Columbia University

Footnotes

The following is an excerpt from the author’s forthcoming magnus opium, “Economics for Every Child”.
The author is Lecturer in Economics and Nursery Tales at the Progressive Progress Kindergarten, Atlantis 5. He is indebted for help and criticism to himself, who however is not to be charged with any responsibility for the following. Since consumption determines the course of production, all the responsibility rests with the reader.
Just what did you expect to find down here? A definition of a boom, perhaps? You might have known that a paper like this has no sensible footnotes. Of course, if you are scholarly enough to insist on a reference, look at pages 385-403 of the General Theory, where you will find an excellent summary of its doctrines — arranged alphabetically. [Curator’s note: pages are the index of Keynes’ General Theory.]
The author categorically refuses to apologize to the reader. If he has read this far it is his own fault and it serves him right, and anyone who had not read this far has no business looking at the final footnote.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Martin Bronfenbrenner Papers, 1939-1995. Box 25, Folder “Teaching Materials: Macro-econ n.d.”.

Copy also in Box 1 of the Thomas Mayer Papers, also in the Economists’ Papers Archive at Duke.

Tags Bronfenbrenner, MayerThomas

Chicago Economists Money and Banking

Chicago. Ph.D. Thesis Committees in Monetary Economics. Patinkin’s Research, 1968

Post author By Irwin Collier
Post date 2022-12-12
2 Comments on Chicago. Ph.D. Thesis Committees in Monetary Economics. Patinkin’s Research, 1968

The first boxes of archival material that I examined as my research project on the evolution of graduate economics training was beginning to take shape came from Don Patinkin’s papers back when Duke’s Economists’ Papers Archive still bore the modest descriptor of “Economists’ Papers Project”.

This post transcribes some of the research material collected by Patinkin in his survey of Chicago style monetary economics. Fun Fact: his research assistant while on leave at M.I.T. was the graduate student Stanley Fischer, from whom incidentally I was to take my first graduate macroeconomics course (Patinkin’s book was on the reading list, surprise, surprise).

Doctoral theses advisers were identified for a dozen and a half Chicago theses that drew Don Patinkin’s attention. This is the sort of information that doesn’t normally jump at you in digitised form through a duly diligent internet search, so I thought it worth my time to file this information for now in a blog post. Minor additions have been added in square brackets for the sake of completeness.

______________________________

List of Patinkin’s copy request for Chicago Ph.D. theses

Author	Article	Details of parts photographed	Box No.
1. Bach, George [Leland]	Price Level Stabilization: [Some Theoretical and Practical Considerations]	[blank]	[blank]
2. Bloomfield, Arthur [Irving]	International Capital Movement and the American Balance of Payments 1929-1940	Title, Contents, Bibliography. pp. 513-514, 578-579.	T-304
3. Bronfenbrenner, Martin	Monetary Theory and General Equilibrium	Title, Preface, Bibliography. Chaps. 1, 4, 7, 8, 9, 10, 11.	T-10250
4. Brooks, Benjamin [Franklin]	A History of Monetary Theory in the United States Before 1860	Contents, Preface, Bibliography. Chap. 11.	T-9885
5. Caplan, Benjamin	The Wicksellian School—A Critical Study of the Development of Swedish Monetary Theory, 1898-1932	Title, Contents, Preface, Bibliography.	T-7847
6. Cox, Garfield V.	Business Forecasting in the United States 1919-1928	Title, Contents, Preface, Bibliography.	T-17-91
7. Daugherty Marion [Roberts]	The Currency-Banking Controversy	Title, Contents, Bibliography pp. 41, 54, 130, 133, 246, 316.	T-10282
8. Harper, [William Canaday] Joel	Scrip and Other Forms of Local Money	Title, Contents, Bibliography.	T-145
9. Leigh, Arthur Hertel	Studies in the Theory of Capital and Interest Before 1870	Title, Contents, Bibliography.	T-554
10. Linville, Francis [Aron]	Central Bank Co-operation	Title, Contents, Bibliography.	T-11508
11. McEvoy, Raymond H.	The Effects of Federal Reserve Operations 1929-1936	Title, Contents, Preface Bibliography.	T-7731
12. McIvor R. Craig	Monetary Expansion in Canadian War Finance, 1939-1946	Title, Contents, Bibliography.	T-10268
13. McKean, Roland Neely	Fluctuations in Our Private Claim-Debt Structure and Monetary Policy	Title, Contents, Bibliography. Chaps. 1, 2, 3, 4, 5, 6, 7, 8	T-90
14. Reeve, Joseph [Edwin]	Monetary Proposals for Curing the Depression in the United States 1929-1935	[blank]	T-11022
15. Shaw, Ernest Ray	The Investment and Secondary Reserve Policy of Commercial Banks	Title, Contents, Preface, Bibliography.	T-8322
16. Snider, Delbert [Arthur]	Monetary, Exchange, and Trade Problems in Postwar Greece	Title, Contents, Bibliography.	T-1031
17. Tongue, William [Walter]	Money, Capital, and the Business Cycle	Title, Contents, Preface, Bibliography.	T-670

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library, Economists’ Papers Archive. Don Patinkin Papers, University of Chicago School of Economics Raw Materials, Box 2, Folder “Chicago, general (?). from binder: “U. Chicago Ph.D. Theses”, folder 1 of 2”.

______________________________

The University of Chicago
Chicago, Illinois 60637

Department of Economics

August 21, 1968

Professor Don E. Patinkin
Economics Department
Massachusetts Institute of Technology
Cambridge, Massachusetts

Dear Professor Patinkin:

I am listing below the information (Committee members) you requested in your letter of July 8, 1968. I am also hoping that you have received your microfilm by now. The Photoduplication department was to have mailed them to you on August 13.

Bach, George [Leland]	1940	S. E. Leland C. W. Wright H. C. Simon
Bloomfield, Arthur [Irving]	1942	J. Viner Lloyd W. Mints O. Lange
Bronfenbrenner, Martin	1939	Frank Knight, chr. S. E. Leland
Brooks, Benjamin [Franklin]	1939	Frank Knight, chr. Lloyd Mints [Viner also thanked in thesis preface]
Caplan, Benjamin	1942	J. Viner O. Lange	L. W. Mints H. C. Simons
Cox, Garfield [V.]	1929	Lionel D. Edie, chr. Jacob Viner Chester W. Wright
Daugherty, Marion [Roberts] (Mrs.)	1941	Jacob Viner, chr. Garfield Cox Lloyd Mints
Harper, Joel [William Canady]	1949 [Summer 1948]	F. Knight O. Lange H. Simons	C. W. Wright L. Mints S. Leland
Leigh, Arthur [Hertel]	1946	Frank Knight, chr. Jacob Viner Oskar Lange
McEvoy, Raymond [H.]	1950	Lloyd W. Mints, chr. Earl J. Hamilton Lloyd A. Metzler
McIvor, Russel [Craig]	1947	Roy Blough, chr. J. K. Langum L.W. Mints [in thesis acknowledgement Mints as the doctoral committee chair]
McKean, Roland [Neely]	1948	Lloyd W. Mints, chr. Lloyd A. Metzler Earl J. Hamilton A. Director
Reeve, Joseph [Edwin]	1939	Lloyd W. Mints, chr. Garfield V. Cox Jacob Viner
Shaw, Ernest [Ray]	1930	Lionel D. Edie, chr. Lloyd W. Mints Stuart P. Meech (Bus. School)
Snider, Delbert [Arthur]	1951	L. Metzler, chr. R. Blough Bert Hoselitz
Tongue, William [Walter]	1947	L. W. Mints, chr. Frank H. Knight H. Gregg Lewis

As you can see in some instances the Chairman was not listed, but the examining committee was listed. I wrote to Professor Cox, 660 W. Bonita, Apt. 24 E, Claremont, California 91711, to get the committee members for him and for Professor E. Shaw. Professor Cox also gave me the address of Professor Lloyd W. Mints, 618 E. Myrtle St., Ft. Collins, Colorado, should you have any interest. I hope this is sufficient.

Yours truly,
[signed]
(Mrs.) Hazel Bowdry
Sec. to Professor Telser

* * * * * * * * * * *

The University of Chicago
Chicago, Illinois 60637

Department of Economics

October 23, 1968

Professor Don Patinkin
Department of Economics
The Eliezer Kaplan School of
Economics and Social Sciences
The Hebrew University
Jerusalem, Israel

Dear Professor Patinkin:

In answer to your letter of October 4, I have rechecked the files and find the below listed information.

George Bach’s committee members:

L. W. Mints, chr.
S. E. Leland
C. W. Wright
Oskar Lange
F. H. Knight
H. C. Simons
Jacob Viner
Jacob Left
Maynard Krueger

This is the order in which the examining committee is listed.

Martin Bronfenbrenner:

Henry Schultz chr.
J. Viner
L. W. Mints
F. Knight
A. G. Hart
H. C. Simon

Joel Harper:

S. E. Leland, Chr.
H. Simons
L. W. Mints
Mr. Chatters

Benjamin Brooks:

L. Mints, chr.
J. Viner
F. Knight

I checked Faculty records with Mrs. Mosby, and found a re-appointment for Henry Simons dated June 3, 1930.

I hope this information is helpful, and I am sorry I cannot give more definite committee members in the case of Bach.

Sincerely yours,
[signed]
(Mrs.) Hayzel Bowdry

P.S. I hope you have received the microfilm by now. It was mailed via airmail yesterday.

Image Source: Don Patinkin article at Gonçalo L. Fonseca’s History of Economic Thought website. Colorized at Economics in the Rear-view Mirror.

Tags BachGL, BloomfieldAI, Blough, Bronfenbrenner, BrooksBF, CaplanB, CoxGV, DaughertyMR, Director, Edie, HamiltonEJ, HarperWCJ, HartAG, Hoselitz, Knight, KruegerM, Lange, Langum, LeftJ, LeighAH, Leland, LewisHG, LinvilleFA, McEvoyRH, McIvorRC, McKeanRN, Meech, Metzler, Mints, Patinkin, ReeveJE, SchultzH, ShawER, SimonHC, Simons, SniderDA, Telser, TongueWW, Viner, WrightCW

Agricultural Economics Chicago Iowa Minnesota Suggested Reading Syllabus

Minnesota. Course outline and reading for graduate macroeconomics. Brownlee, probably 1959

Post author By Irwin Collier
Post date 2020-12-21

Based on a pamphlet in which he argued that “properly fortified margarine ‘compared favorably’ with butter in nutrition and palatability”, the economics Ph.D. student, Oswald Harvey Brownlee (1917-1985), brought the wrath of the Iowa Farm Bureau among others down upon himself and his economist seniors. After the President of Iowa State caved to the state’s dairy interests in the matter, Theodore W. Schultz, D. Gale Johnson, and O. H. Brownlee were all to ultimately head off to the University of Chicago.

Oswald Harvey Brownlee. Putting dairying on a war footing, 64 page pamphlet published by Iowa State College Press, 1944.

See: Seim, David L. “The Butter-Margarine Controversy and “Two Cultures” at Iowa State
College.” The Annals of Iowa 67 (2008), 1-50.

Also mentioned in: Milton and Rose Friedman, Two Lucky People: Memoirs, p. 193.

Brownlee went on to teach at the University of Minnesota, where we found him teaching a graduate macroeconomics course. Clearly that was still time that the hatches separating microeconomics and macroeconomics were not so securely battened as today. “Public finance” was Brownlee’s major field so his broad fiscal policy interests make sense.

The course outline transcribed in this post comes from Martin Bronfenbrenner’s papers at the Economists’ Papers Archive at Duke University. Bronfenbrenner taught at the University of Minnesota from 1959-1962 and we can presume that the copy of Brownlee’s macroeconomics course outline with readings was for either 1958-59 or 1959-60. A second, apparently later, version of the course outline for “Economics 176A” with “Brownlee” handwritten in the upper right corner is also found in the same folder. Three new readings from the second copy have been added and placed within square brackets below. The readings in Parts I and II, IX and X were not included in the second outline for “Economics 176A”.

_______________________

Handwritten note at top:
“Martin, Here is the outline for the Macro theory. Which part do you want to teach? [signed] Oz”

Economics 176A-B
Course Outline and Suggested Readings

This brief outline and reading list is intended to serve as a general summary of the materials to be considered during the course and as a guide to class discussion and to outside reading. The detail in the outline does not necessarily correspond to the detail in class discussion. The most significant readings are starred (*). The literature in this field has grown so rapidly during the past decade that this reading list cannot be considered as a complete bibliography of relevant writings.

It is hoped that during the quarter the student will gain an adequate understanding of how the equilibrium values of the relevant variables (gross national product, employment, the general level of prices and the rate of interest, for example) might be determined, and how changes in certain exogeneous variables (including various economic policy variables) might affect these equilibrium values. Although the primary emphasis of the course is on equilibrium levels of certain variables, an introduction to dynamic analysis (a description of the path of a variable over time) will be offered. This will provide the basis for subsequent discussion of business cycle theory and growth models.

General Orientation of the Course
1. Relationship of macro-static theories to other classes of economic theories
2. Limitations of macro-static analysis as a basis for policy statements
The firm’s Demand for Labor
1. Importance for labor hired by business firms in the labor market as a whole
2. Static theory of production with emphasis on the demand for labor.
  1. Nature of the firm’s production function
  2. Determinants of equilibrium level of employment within the firm
  3. Comparisons of equilibrium levels of employment under various resource market, product market and technological conditions
3. Effects of Changes in Quantities of Other Resources Upon Demand for Labor

Readings:

1—K. E. Boulding, Economic Analysis, Chapter 31 (revised edition)

2—George Stigler, The Theory of Price, Chapters 6-11.

3—Paul A. Samuelson, Foundations of Economic Analysis, Chapter 3, pp. 21-33.

4—Joan Robinson, Economics of Imperfect Competition, Books VII and VIII.

Equilibrium in the Labor Market for the Economy as a whole
1. Aggregation of outputs, labor inputs, wage rates and prices
2. Determination of various combinations of general level of prices and “real” output which will maintain equilibrium in the labor market—an “aggregate supply” function.
  1. With money wage rate autonomously determined: a wage “floor”, a wage “ceiling”, both a “floor” and a “ceiling”.
  2. With supply of labor dependent upon “real” wages.
  3. With supply of labor dependent upon “real” and money wages: the effects of asset holdings.
3. Degree of Determinateness of relevant variables given only equilibrium in the labor market.
  1. Price level, real output and employment not uniquely determined
    1. Various combinations of price level and real output will maintain equilibrium in labor market, given the autonomously specified money wage or given fixed monetary debts and credits and flexible money wages.
    2. Employment is determined only upon the real wage, real output and employment are uniquely determined, but price level is not.

Readings:

1.*—Jacob Marschak, Income, Employment and the Price Level, Lectures 19 and 20.

2.—Sidney Weintraub, Income and Employment Analysis, Chapters 11 and 13.

3.—Francis M. Boddy, et al., Applied Economic Analysis, pp. 229-248.

4.—O. H. Brownlee, Economics of Public Finance, pp. 47-51.

5.—Don Patinkin, Money, Interest and Prices, IX-XII.

6.—Louis Hough, “An Asset Influence in the Labor Market”, Journal of Political Economy, June 1955.

7.—Robert Solow, “Technical Change and the Aggregate Production Function”, Review of Economics and Statistics, August 1957.

[8.*—Gershon Cooper, “Taxation and Incentive in Mobilization” in Readings in Taxation edited by Musgrave and Shoup.]

Aggregate Demand for Goods and Services: The “Crude Classical Theory”
1. The Quantity Identity
  1. The Demand for Money—a linear function of money income (expenditure)
  2. Assuming the supply of money (M) and the fraction of income which people with to hold as cash balances are independently determined, the equilibrium level of total money expenditure is determined.
  3. Effects of changes in money demand and money supply upon equilibrium level of money income or expenditure.
  4. Incorporation of assets as a variable influencing the demand for money
  5. Information obscured by the simple quantity identity (that omitting assets as a variable)
    (Note: further analysis of the quantity identity in terms of the kind of aggregate demand function for goods and services which it might imply will be made in subsequent sections).
2. Equilibrium in the Labor, Money, and Commodity Markets under the assumption of the quantity identity.
  1. Quantity of labor supplied a function only of money wages
  2. Quantity of labor supplied a function only of “real” wages
  3. Division of “real” output between consumption and investment.

Readings:

1.*—J. M. Keynes, The General Theory of Employment, Interest, and Money, Chapters 2 and 19

2.—L. Klein, The Keynesian Revolution, Chapter 1 and the technical appendix, pp. 199-205

3.—Albert G. Hart, Money, Debt and Economic Activity, Chapters IV-VI and VIII

4.—Alvin Hansen, Monetary Theory and Fiscal Policy, Chapters 1-3

5.—Franco Modigliani, “Liquidity Preference and the Theory of Interest and Money”, Econometrica, 12: 45-88 (January, 1944)

6.—Seymour Harris, (editor) The New Economics, Part IX, Chapter XLI

7.—Francis M. Boddy, et al., Applied Economic Analysis, Chapter 12, 13 (pp. 222-229)

8.*—Jacob Marschak, Income, Employment and the Price Level, Lecture 2.

9.—Don Patinkin, Money, Interest and Prices, I-VIII

10.—Archibald and Lipsey, “Monetary and Value Theory,” Review of Economic Studies, October, 1958

11.*—Milton Friedman, Studies in the Quantity Theory of Money, Chapter I

12.—James Tobin, “The Interest-Elasticity of Transactions Demand for Cash”, Review of Economics and Statistics, August, 1956

13.—H. Rose, “Liquidity Preference and Loanable Funds,” Review of Economic Studies, XXIV (1956-57)

14.—Don Patinkin, Liquidity Preference and Loanable Funds, Economica, November, 1958

15.—Vera Lutz, “Multiplier and Velocity Analysis: A Marriage”, Economica, February, 1955

16.—G. C. Archibald, “Multiplier and Velocity Analysis: An Amendment”, Economica, August 1956

[17.—Ira O. Scott, “The Availability Doctrine: Theoretical Underpinnings”, Review of Economic Studies, XXV No. 1, 41-48]

Aggregate Demand for Goods and Services: The “Keynesian Theory”
1. Equilibrium in the “Commodity Market”
  1. Consumption (and Saving)
    1. Relationship to income
    2. Relationship to rate of interest
  2. Investment
    1. Relationship to the rate of interest
      1. The marginal efficiency of capital
      2. Uncertainty and the level of investment
    2. Relationship to current income
  3. The Equating of Savings and Investment (Aggregate Demand for Commodities = Aggregate Supply of Commodities)
  4. Determination of various combinations of the rate of interest and real income which will fulfill the condition for equilibrium in the commodity market (will make savings = investment)
2. Equilibrium in the Money Market
  1. The Liquidity Preference Schedule (The Demand for Money)
  2. With money supply (M) autonomously determined, there will be various combinations of the rate of interest, real output and the price level which will provide for equilibrium in the money market.
    1. The general case
    2. The special “Keynesian” case
3. Simultaneous Equilibrium in the Money and Commodity Markets: An Aggregate Demand Function
  1. Equilibrium rates of real output and price level which fulfill the conditions for equilibrium in both the money and commodity markets.

Readings:

1.*—Keynes, The General Theory of Employment, Interest, and Money

2.—The Keynesian Revolution (*particularly Chapter 3)

3.*—J.R. Hicks, “Mr. Keynes and the Classics”, Econometrica, 4: 147-159 (April, 1937); also included in Readings in Income Distribution, The Blakiston Co.

4.*—Franco Modigliani, “Liquidity Preference and the Theory of Interest and Money”, Econometrica, 12; 45-88 (January, 1944)

5.—Alvin Hansen, Monetary Theory and Fiscal Policy, Chapters 4-6

6.—Sidney Weintraub, Income and Employment Analysis, Part II

7.—K.E. Boulding, The Economics of Peace, Chapters 7-9

8.—Wassily Leontief, “Postulates; Keynes” General Theory and the Classicists”, included in The New Economics, Part 4, Chapter XIX

9.—The New Economics, Parts 3 and 9

10.—Abba P. Lerner, The Economics of Employment, Part II

11.*—Jacob Marschak, Income, Employment and the Price Level, Lectures 3-18

12.—O.H. Brownlee, “The Theory of Employment and Stabilization Policy” Journal of Political Economy, Oct. 1950, pp. 412-24.

13.—Ira O. Scott, Jr., “An Exposition of the Keynesian System”, The Review of Economic Studies, XIX, (1), pp. 12-18

14.—Joan Robinson, “The Generalization of the General Theory”, included in The Rate of Interest and Other Essays.

15.—Louis Hough, “The Price Level in Macroeconomic Models”, The American Economic Review, June, 1954, pp. 269-86.

16.—Milton Friedman and Gary S. Becker, “A Statistical illusion in Judging Keynesian Models”, Journal of Political Economy, February, 1957

17.—L. R. Klein, “The Friedman-Becker Illusion,” Journal of Political Economy, December, 1958; and Friedman & Becker, “Reply”, same issue.

18.—Martin J. Bailey, “Saving and the Rate of Interest”, Journal of Political Economy, August, 1957.

[19.—Hans Brems, Output, Employment, Capital and Growth, Part I.]

The Equilibrium Levels of Output, Employment, Prices and the Rate of Interest in the Keynesian System.
1. Aggregate Supply and Aggregate Demand with Flexible Money Wages
2. Aggregate Supply and Aggregate Demand with Labor Supply Perfectly Elastic at a Given Money Wage
3. Effects of Changes in Autonomous Variables and Parameters
  1. The autonomous component of investment
    1. The multiplier
  2. Government expenditure for goods and services
  3. The export surplus
  4. Money wage rates
  5. Technology
  6. The degree of monopoly and employers’ market expectations
  7. Population and the labor supply
  8. The money supply
  9. Marginal propensities to consumer and invest
An alternative Macro-Static System
1. Some weaknesses in the Keynesian theory
  1. A change in the structure of the system required to explain U.S. postwar experience
  2. Increased savings: income ratio as income increases not empirically verified.
2. Assets consumption as a variable affecting
  1. Real Assets
  2. Monetary assets (cash and government debt)
  3. Aggregate demand for goods and services when assets are included as a variable in the consumption function
    1. Comparison with quantity theory
    2. Comparison with Keynesian theory
3. The Duesenberry-Modigliani Hypothesis
4. Including assets in other Functions: Labor Supply and Demand for Money

Readings:

1.*—Don Patinkin, “Price Flexibility and Full Employment”, American Economic Review, 38: 543-64 (September, 1948).

1a.*—Don Patinkin, Money, Interest and Prices, XIII-XV and appropriate appendices.

2.—__________, “The Indeterminancy of Absolute Prices in Classical Economic Theory”, Econometrica, 17: 1-27

3.—__________, “Involuntary Unemployment and the Keynesian Labor Supply Function”, Economic Journal, LIX: 360-83

4.—Haavelmo, Hickman, Leontief and Phipps on Patinkin, Econometrica 18: 1-26 (January, 1950)

5.—James Tobin, “Money Wage Rates and Employment”, included in The New Economics, Part 8, Chapter XL.

6.—Arthur Smithies, “Effective Demand and Employment”, included in The New Economics, Part I, Chapter XXXIX.

7.—A. P. Lerner, “Mr. Keynes’ General Theory of Employment, Interest, and Money”, Reprinted in The New Economics, Part 3, Chapter XI

8.*—Milton Friedman, “A Monetary and Fiscal Framework for Economic Stability”, American Economic Review, 38: 245-64 (June, 1948)

9.—A. C. Pigou, “Economic Progress in a Stable Environment”, Economica, 1947, pp. 180-90

10.—A. C. Pigou, “The Classical Stationary State”, Economic Journal, 53: 343-51 (1943)

11.*—James Duesenberry, “Income-Consumption Relations and Their Implications”, included in Income, Employment and Public Policy, Essay III in Part One, and as Chapter I in Income, Saving, and the Theory of Consumer Behavior.

[11a.—John H. Power, “Price Expectations, Money Illusion, and the Real-Balance Effect”, Journal of Political Economy, April, 1959, 1331-43.]

12.*—Franco Modigliani, “Fluctuations in the Saving-Income Ratio: A Problem in Economic Forecasting”, included in National Bureau of Economic Research, Studies in Wealth, Volume XI, pages 371-443.

13.—Paul A. Samuelson, “The Simple Mathematics of Income Determination”, included in Income Employment and Public Policy,” Essay VI in Part One.

14.—Oscar Lange, Price Flexibility and Employment, particularly Chapters I-V and IX-XI.

15.—Donald M. Fort, “A Theory of General Short-Run Equilibrium,” Econometrica, 13: 293-310 (October, 1945)

16.—Sidney Weintraub, Income and Employment Analysis, Part III

17.—G. L. Bach, “Monetary-Fiscal Policy Reconsidered”, Journal of Political Economy, LVII: 383-94 (October 1949)

18.—George Terborgh, The Bogey of Economic Maturity.

19.—A. P. Lerner, Economics of Employment, parts IV and V.

20.*—William Hamburger, “The Determinants of Aggregate Consumption”, Review of Economic Studies, XXII (1), pp. 23-34

21.*—Franco Modigliani and Richard Brumberg, “Utility Analysis and the Consumption Function”, included in Kenneth Kurihara, The Post Keynesian System—Essays in Honor of John Maynard Keynes.

22.—O. H. Brownlee, Economics of Public Finance, Chapters 3-6

23.—__________, “The Theory of Employment and Stabilization Policy”, Journal of Political Economy, October, 1950, pp. 412-24.

24.*—Milton Friedman, A Theory of the Consumption Function (particularly chapters 1-4.)

Monetary-Fiscal Policy
1. Effects of changes in government expenditures for goods and services, net tax collections, the tax structure and the supply of money on the demand for and supply of goods and services.
  1. In the Keynesian System
  2. In the Alternative System
2. Built-In Flexibility vs. Ad. hominum [sic, “ad hoc”] changes.

Readings:

1.—Robert L. Bishop, “Alternative Expansionist Fiscal Policies: A Diagrammatic Analysis”, Lloyd A. Metzler, ed. Income, Employment and Public Policy.

2.—O. H. Brownlee, “Taxation and the Price Level in the Short Run”, The Journal of Political Economy, February, 1954, pp. 26-33.

3.—__________, The Economics of Public Finance, Chapter 6.

4.—Paul A. Samuelson, “Principles and Rules in Modern Fiscal Policy: A Neo-Classical Reformulation”, included in Money, Trade, and Economic Growth.

5.*—Milton Friedman, “the Effects of a Full-Employment Policy on Economic Stability: A Formal Analysis”, included in Essays in Positive Economics.

6.—E. Cary Brown, “The Static Theory of Automatic Fiscal Stabilization”, Journal of Political Economy, October 1955.

7.—Alfred Conrad, “The Multiplier Effects of Redistributive Public Budgets”, Review of Economics and Statistics, May, 1955.

8.—William A. Salant, “Taxes, Income Determination and the Balanced Budget Theorem”, Review of Economics and Statistics, May, 1957.

[9. Bent Hansen, The Economic Theory of Fiscal Policy.]

Some Applications of Static Macroeconomic Analysis to Other Problems
1. Disaggregated Systems
2. Effects of Shifts in Expenditure and Income in One Sector upon Income in Other Sectors.

Readings:

1.—John S. Chipman, The Theory of Inter-Sectoral Money Flows and Income Formation.

2.—D. Gale Johnson and O. H. Brownlee, “Reducing Price Variability Confronting Primary Producers”, Journal of Farm Economics, May, 1950, 176-193.

Macrodynamic Analysis
1. The Nature of “Business Cycle” Theories.
2. First-Order Difference Equations
  1. The Cobweb Theorem
  2. Lagging of Consumption or Investment by One Period
  3. Introduction of Disturbances
  4. A Dynamic “Keynesian” Model
3. Models Involving Higher Order Difference Equations
  1. “Interactions between the ‘Multiplier’ and the ‘Acceleration Principle’”.
  2. Inventory decisions as related to changes in consumption or investment in Plant and Equipment.
4. Problems of Prediction

Readings:

1.*—Paul A. Samuelson, “Interactions Between the Multiplier and the Principle of Acceleration”, included in Readings in Business Cycle Theory, 261-69.

2.—Mordecai Ezekiel, “The Cobweb Theorem”, included in Readings in Business Cycle Theory, 422-42.

3.—J. M. Clark, “Business Acceleration and the Law of Demand”, included in Readings in Business Cycle Theory.

4.—R. F. Harrod, The Trade Cycle, Chapter 2.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Martin Bronfenbrenner Papers, Box 25, Folder “Macroeconomics, Problems & exercises. 1 of 2. 1961-70, n.d.”.

Image Source: Douglas Clement, “A Golden History” in Minnesota Economics (Fall 2006), p. 2.

Tags Bronfenbrenner, Brownlee, Friedman, JohnsonDG, Schultz

Exam Questions Harvard Suggested Reading Syllabus

Harvard. Summer School, Syllabus and Exams for Income Distribution. Bronfenbrenner, 1970

Post author By Irwin Collier
Post date 2020-06-23

Try to imagine what a summer school student at Harvard might have thought in the summer of 1970 (scarcely a month after the Kent State University shootings) when confronted with the five page reading list in Martin Bronfenbrenner’s economics course on income distribution. Next jump down to the four page final exam and also imagine that summer student’s reaction. Well, that was exactly a half-century ago and it was still a time when professors could get away with assigning mountains of reading followed by an examination demanding both comprehension and thought. Chapeau!

Worth noting: Joan Robinson appeared in four of the seven exam questions.

_______________________

Summer 1970

INCOME DISTRIBUTION—M. Bronfenbrenner

Text: B.F. Haley and William Fellner (eds.), Readings in the Theory of Income Distribution.

Note: Few will have time for even half the materials below. Students should concentrate where their interests are strongest, and/or where class presentation seems weakest.

Introduction
1. Theoretical

Clark, Distribution of Wealth, Ch. 1.

Galbraith, Affluent Society, Ch. 7.

Kuznets, “Economic Growth and Income Inequality,” AER, Mar. 55.
(Reprinted in Kuznets, Economic Growth and Structure.)

Klein, Introduction to Econometrics, Ch. 4.

M. Friedman, “Choice, Chance, and the Personal Distribution of Income,” JPE, Aug. 53.

Mincer, “Investment in Human Capital and Personal Income Distribution,” JPE, Aug. 58.

Weintraub, General Theory of the Price Level, Output, Income, and Growth, Ch. 3-4.

Solow, “Constancy of Relative Shares,” AER, Sept. 58, or Bronfenbrenner “Relative Shares and Elasticity of Substitution,” JPE, June 60.

1. Statistical

Lydall, Structure of Earnings, Ch. 2-4.

Budd, Inequality and Poverty, pp. x-xxviii (Budd), Parts 2-3 (Solow, Goldsmith, Lampman, Projector and Weiss, Stigler, Meade).

Readings, 4 (Bowman) [“A Graphical Analysis of Personal Income Distribution in the United States”]

Kuznets, Shares of Upper Income Groups in Income and Saving, pp. xxvii-xli.

Lampman, “Recent Changes in Income Inequality,” AER, June 54.

Lebergott, “Factor Shares in the Long Run,” in NBER, Behavior of Income Shares, pp. 53-86, or Kravis, “Relative Income Shares in Fact and Theory,” AER, Dec. 59.

Phillips, “Labor Share and Wage Parity,” R.E.Stat., May 60.

Maldistribution?
1. General Ethical Issues

Budd, Part 1 (Meade and Hitch, de Jouvenel, Wallich, Tawney, Friedman)

Shaw, Intelligent Woman’s Guide to Socialism and Capitalism, Ch. 2-14, 20-23 (skim).

Lerner, Economics of Control, Ch. 3.

1. General Economic Issues

Hobson, Evolution of Modern Capitalism, Ch. 11.

Durbin, Purchasing Power and Trade Depression, Ch. 1.

Bronfenbrenner, Yamane, and Lee, “Study in Redistribution and Consumption,” R.E.Stat., May 55.

Budd, Part 4 (Meade, Friedman, Simons, Pigou).

1. American Poverty Program

Budd, Part 5 (Harrington, Miller, Ornati, Lampman, Johnson, Ad Hoc Committee on Triple Revolution, Friedman, Tobin)

R.D. Friedman, Poverty, Definition and Perspective, Ch. 2-3.

Green, Negative Taxes and the Poverty Problem, Ch. 4-6, 8.

Thurow, Poverty and Discrimination, Ch. 3-5, 9.

Demand for Productive Inputs
1. Marginal Productivity

Hicks, Theory of Wages, Ch. 1.

Ferguson, Neoclassical Theory of Production and Distribution, Ch. 4-6, 9, 12.2.

1. Complications and Objections

Levinson, Unionism, Wage Trends, and Income Distribution, Ch. 1.

Dobb, Wages, pp. 81-92, Ch. 5.

Weintraub, Approach to the Theory of Income Distribution, Ch. 1.

Readings, 6 (Stigler [“Production and Distribution in the Short Run”]), 8 (Machlup [“On the Meaning of the Marginal Product”]) , 12 (Robertson [“Wage-Grumbles”]), 15 (Rolph [“The Discounted Marginal Productivity Doctrine”]).

The Lester-Machlup-Stigler Controversy: AER, Mar. 46 and Sept. 46, Mar. 47. (Reprinted in Clemence, Readings in Econ. Analysis).

Reder, “Marginal Productivity Reconsidered,” JPE, Oct. 47 (Reprinted in Clemence, Readings in Econ. Analysis.)

1. Exploitation?

Robinson, Imperfect Competition, Ch. 21-26, or Pigou, pt. III, Ch. 14-19.

Rothschild, Theory of Wages, Ch. 7-8.

Readings 7 (Chamberlin [“Monopolistic Competition and the Productivity Theory of Distribution”]), 14 (Bloom [“A Reconsideration of the Theory of Exploitation”]).

Bronfenbrenner, “Potential Monopsony,” Ind. Labor Rel. Rev., Apr. 56.

1. Impact of Innovations

Ferguson, Ch. 12.3, 16.

Readings, 9 (Robinson [“The Classification of Inventions”]), 10 (Lange [“A Note on Innovations”])

Stiglitz and Uzawa, Readings in Modern Theory of Economic Growth, 6 (Hicks [“From Theory of Wages”]), 9 (Fellner [“Two Propositions in the Theory of Induced Innovations”]), 10 (Kennedy [“Induced Bias in Innovation and the Theory of Distribution”]).

Seeber, “Classification of Inventions,” So. Ec. J., Apr. 62.

Labor Supply

Rothschild, Ch. 3, or Stigler, Theory of Price (3^rd), pp. 194-202.

Readings, 13 (Robbins [“On the Elasticity of Demand for Income in Terms of Effort”]).

Long, The Labor Force Under Changing Income and Employment, Ch. 1.

Break, “Income Taxes, Wage Rates, and Factor Services,” Natl. Tax J., Dec. 53.

Collective Bargaining
1. Theory and Evidence

Hicks, Ch. 7.

Readings, 19 (Dunlop [Wage Policies of Trade Unions]).

Ross, Trade Union Wage Policy, Ch. 2, 6.

Fellner, Competition Among the Few, Ch. 10.

Rees, Economics of Trade Unions, Ch. 4-5.

Lewis, Unionism and Relative Wages in U.S., Ch. 1, 4-6.

Bronfenbrenner, “Incidence of Collective Bargaining Once More,” So. Ec. J., Apr. 58. (Reprinted in Galenson and Lipset, Labor and Trade Unionism.)

1. The Labor Monopoly Issue

Simons, Economic Policy for a Free Society, Ch. 6.

Lester, “The Labor Monopoly Issue,” JPE, Dec. 47.

Lindblom, Unions and Capitalism, Ch. 1-3, 14-18.

Lerner, Economics of Employment, Part IV, or Rothschild, Ch. 13.

1. Wage Difference (Omitted in Class)

Mill, Principles of Political Economy, Bk. II, Ch. 14.

Dobb, Ch. 6.

Mills, White Collar, Ch. 6-7, or Harris, Market for College Graduates, Ch. 3, 3-a.

McCaffree, “Earnings Differential Between White Collar and Manual Occupations,” R.E.Stat., Feb. 53.

Burns, “Comparative Economic Position of Manual and White Collar Employees,” Journ. Of Bus., Oct. 54.

Reder, “Wage Differentials,” in NBER, Aspects of Labor Economics, pp. 257-99.

Wages and Employment

Keynes, General Theory of Employment, Interest and Money, Ch. 19.

Readings, 18 (Tarshis [“Changes in Real and Money Wages”]), 17 (Lerner [“The Relation of Wage Policies and Price Policies”]).

Slichter-Nathan Controversy: “Raising the Price of Labor as a Method of Increasing Employment,” R.E.Stat., Nov. 49.

Bronfenbrenner, “Contribution to Aggregative Theory of Wages,” JPE, Dec. 56.

Theory of Interest
1. Real Theories

Conard, Introduction to the Theory of Interest, Ch. 3, 4, 7.

Hirschleifer, “Theory of Optimal Investment Decision,” JPE, Aug. 58.

Knight, “Interest,” in Encyclopedia of Social Sciences, or, “Diminishing Returns from Investment,” JPE, Mar. 44.

Patinkin, Money, Interest, and Prices, Ch. 4.

1. Monetary Theories

Readings, 22 (Keynes [“The Theory of the Rate of Interest”]), 23 (Robertson [“Mr. Keynes and the Rate of Interest”]), 24 (Hicks [“Mr. Keynes and the ‘Classics’; A Suggested Interpretation”]).

Harris, (Ed.), New Economics, 43-46 (Lerner).

Lange, “Rate of Interest and Optimum Propensity to Consume,” in AEA, Readings in Business Cycle Theory, 8.

Conard, Ch. 9-10.

Patinkin, Ch. 15.

1. Rate Differences

Readings, 26 (Lutz [“The Structure of Interest Rates”])

Hicks, Value and Capital (2^nd), pp. 144-52.

Conard, Ch. 17.

Kessel, “Cyclical Behavior of Term Structure of Interest Rates,” (NBER Occasional Paper 91), Ch. 1.

Theory of Rent

Ricardo, Principles of Political Economy, Ch. 2.

George, Progress and Poverty, Bk. III, Ch. 2; also skim Books IV-VI.

Robertson, Lectures on Political Economy, Vol. ii, Ch. 3

Readings, 31 (Buchanan [“The Historical Approach to Rent and Price Theory”]).

Ferguson, Ch. 1.4.2, 2.2.1, 2.3.2, 3.4.3.

Theory of Profit

Knight, Risk, Uncertainty, and Profit, Ch. 1-2, 8-9.

Readings, 27 (Knight [“Profit”]), 29 (Gordon [“Enterprise, Profits, and the Modern Corporation”]), 30 (Crum [“Corporate Earnings on Invested Capital”]).

Weston, “Generalized Uncertainty Theory of Profit,” AER, Mar. 50.

Marchal, “New Theory of Profits,” AER, Sept. 51.

Bronfenbrenner, “Rehabilitation of Naïve Profit Theory,” So. Ec. J., Apr. 60 (Reprinted in Brait and Hochman, Readings in Microeconomics).

Joint Economic Committee, U.S. Congress, Profits Hearings, Dec. 48. (Testimony of Slichter, Harris, Ruttenberg, Montgomery, and Nixon on definition and measurement).

Aggregative Distribution Theories

Scitovsky, “Some Theories of Income Distribution,” in NBER, Behavior of Income Shares, pp. 15-31.

Davidson, Theories of Aggregate Income Distribution, Ch. 4-8.

Douglas, “Are There Laws of Production?” AER, Mar. 48. (Reprinted in Kelley edition of Douglas, Theory of Wages.)

Ferguson, Ch. 12.4-12.9, 15.

Readings, 11 (Kalecki [“The Distribution of the National Income”]), or Rothschild, Ch. 15.

Boulding, Reconstruction of Economics, Ch. 14.

Stiglitz and Uzawa, 21 (Kaldor [“Alternative Theories of Distribution”]) [Also in Kaldor, Essays in Value and Distribution, no. 10.], 22 (Robinson).

Reder, “Alternative Theories of Labor’s Share,” in Abramovitz, Allocation of Economic Resources.

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library, Economists’ Papers Archives. Papers of Martin Bronfenbrenner, Box 25, Folder “Micro-econ + Distribution, 1 of 2, 1966-71, n.d.”

_______________________

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics S-222—Income Distribution
Summer 1970—M. Bronfenbrenner
Final Examination

In a (probably unsuccessful) attempt to make my own position clear on a number of controversial issues, I have perhaps understressed in class certain powerful statements of contrary positions.

For purposes of this examination, please consider any four of the quotations below. Indicate the portions of distribution theory to which they apply. Then comment upon them, indicating why they do (or do not) appear convincing.

Technical conditions and the rate of profit determine the pattern of normal prices, including the price of labour-time in terms of each commodity; money-wage rates determine the corresponding money price level. But what determines the rate of profit?
Marx closes his system sometimes (following Ricardo) by postulating a real-wage rate governed by the conventional standard of life (the value of labour-time) and sometimes by taking as given the share of net profit in the value of net output (the rate of exploitation). Marshall conceals the problem behind a smoke-screen of moral sentiments. The latter-day neoclassicals are for ever chasing definitions around a circular argument. Sraffa offers no observations on the subject. Von Neumann postulates a real-wage rate which is precisely specified in terms of particular quantities of particular commodities, but leaves us helpless when that assumption is relaxed. The question of what determines the rate of profit, when the real-wage rate is not to be taken as given, is a huge blank in traditional economic teaching.
[Joan Robinson, Essays in the Theory of Economic Growth, p. 11]
Even from the momentary market point of view, the Keynesian formulation tends to obscure unduly the parts played by Productivity and Thrift…While there are hints here and there of a broader treatment, in the main (Mr. Keynes’) plan is to set the rate of interest in a direct functional relation only with that part of the money stock which is held for what he calls “speculative reasons”, i.e., because it is expected that the rate of interest will subsequently rise. Thus the rate of interest is what it is because it is expected to become other than it is; if it is not expected to become other than it is, there is nothing left to tell us why it is what it is. The organ which secretes it has been amputated, and yet it somehow still exists—a grin without a cat. Mr. Plumptre of Toronto…has aptly compared the position of the lenders of money under this theory with that of an insurance company which charges its clients a premium, the only risk against which it insures them being the risk that its premium will be raised.
[Dennis H. Robertson, “Mr. Keynes and the Rate of Interest” in Essays in Monetary Theory, 1940. Pages 35-36.]
…

The price of pig
Is something big,
Because its corn, you’ll understand,
Is high-priced too;
Because it grew
Upon the high-priced farming land.

If you’d know why
That land is high,
Consider this: its price is big
Because it pays
Thereon to raise
The costly corn, the high-priced pig!

[Herbert Joseph Davenport, The Economics of Enterprise, 1913. Pages 107-108]

The level of money-wage rates obtaining at any particular moment is an historical accident. The absolute level of wages in terms of money affects nothing except the words and numbers in which money values are reckoned and the nominal value of the stock of currency. But changes in the level of money-wage rates have important effects upon the behavior of the economy in real terms.
The causes of movements in money-wage rates are bound up with the competition of different groups of workers to maintain or improve their relative positions, and the consequences of changes in wage levels are most important in connection with the competition in international trade.
The level of money-wage rates may be continuously rising simply because it is easier for each group of employers to give way to the demands of their workers and recoup themselves by raising prices than to incur the losses and unpleasantness involved in resisting them.
[Joan Robinson, Essays in the Theory of Economic Growth, pp. 70-71]
A distinction should be made between primary and secondary distribution of the national income.
The national income first of all falls into the hands of the capitalists. Primary distribution of the national income consists on its being distributed between capitalists and workers. The workers receive wages, the capitalists surplus value, which is distributed among the industrialists, merchants, bankers, and big landed proprietors.
After the national income has been distributed among the basic elements of capitalist society, a secondary distribution or redistribution takes place. We have seen that in the non-productive branches of the economy (medical institutions, public services, entertainments, etc.) no national income is created. But the capitalists who control these enterprizes and institutions pay salaries to their employees, cover the cost of maintaining premises, and in addition make a profit. The capitalists cover all these items of expenditure out of the national income created in the sphere of material production by charging for the services provided. These payments produce an average profit for the capitalists in the non-productive sphere. Part of the income of the working people is (also) redistributed through the state budget in the interests of the ruling class. The bourgeois state has its army, police, penal institutions and courts, administrative apparatus and so on. All are maintained out of the state budget, taxes levied upon the population being its main source of revenue. After working people have received wages through the primary distribution on the national income, they have to pay taxes out of them. In this way, the part of the national income put at the disposal of the working people is reduced. (Capitalists, too, pay taxes. But part is returned in the form of extremely high payment for supplies and service to the government. Another part is spent in the upkeep of the state apparatus, army and so on, the chief purpose of which is to defend the interests of these same capitalists.)
This is why not only the distribution, but also the redistribution of the national income in bourgeois society is effected in the interests of the exploiting classes.
[P. Nikitin, Fundamentals of Political Economy, trans. Violet Dutt and Murad Saifulin (probably 1966), pp. 133-135 quoted by Martin Bronfenbrenner in Income Distribution Theory, Chapter 2, footnote 12. Cf: 1983 Translation of a later edition by Jane Syer, pp. 151-152.]
The neo-classical model is most at its ease in a stationary state. The amount of capital that capitalists are willing to maintain in being (neither saving nor dissaving) is a function of the rate of interest, or, alternatively, there is one rate of interest at which net saving is zero. The physical stock of capital and the real-wage rate are such as to have brought the rate of profit into equality with the rate of interest. There is then one value of the stock of capital that yields the rate of return (with a given labor force fully employed) which will cause it to be maintained. This is the value of capital that satisfies the conditions of the stationary state.
When it leaves the stationary state, the neo-classical model is all at sea. With any given value of capital in existence, the amount of saving that the capitalists wish to do to increase it depends upon the rate of interest, which must be equal to the rate of profit, but how can we tell what the rate of profit is till we know the rate of accumulation?
It is an illusion to suppose that “the marginal productivity of capital” provides an independent determinant of the rate of interest. A “quantity of capital” in terms of value has no meaning in terms of physical productivity until the prices of its physical components are known, and this involves the rate of profit. A “quantity of capital” in terms of a list of physical capital goods appropriate to various kinds of output, if they are taken to be fully utilized, entails the output of investment goods, and so the rate of accumulation, independently of the rate of profit that is supposed to determine it. If they are not necessarily fully utilized, then we have to know the current rate of investment to find out the state of effective demand and current profits. Whatever we do, we are one equation short.
The reason why the model works all right in the stationary state has nothing to do with its stationariness. It works because the rate of accumulation—zero—is specified. With any specified rate of accumulation, the function connecting saving with the rate of profit determines the position, for it shows what the rate of profit and the value of capital must be to make saving equal to investment at full employment.
[Joan Robinson, Essays in the Theory of Economic Growth, pp. 81-82]
The theory of the distribution of the product of industry between wages and profits which is knocking about in current economic teaching consists of a number of propositions, each of which is quite unexceptionable in itself, but none of which bears any relation to the rest…The proposition that the share of profits in income is a function of the ratio of investment to income is perfectly correct, but capacity and the degree of monopoly have to be brought in to determine what income it is that profits are a share of, and investment is related to.
[Joan Robinson, Collected Economic Papers, II, p. 145]

L’ENVOI

The bookful blockhead, ignorantly read,
With loads of learned lumber in his head.

(Alexander Pope)

Source: Duke University, David M. Rubenstein Rare Book and Manuscript Library, Economists’ Papers Archives. Papers of Martin Bronfenbrenner, Box 24, Folder “Exams. Micro-econ + distribution. 2 of 2, 1954-66, n.d.”

Image Source: Martin Bronfenbrenner. University of Minnesota Archives/Libraries/Umedia.

Tags Bronfenbrenner, Joan Robinson

Chicago Exam Questions Socialism Suggested Reading Syllabus Undergraduate

Chicago. Readings and exam for “Wage-labor and capital”, 1970

Post author By Irwin Collier
Post date 2020-03-09

The following set of course materials from the University of Chicago was included in a folder for “Comparative Economic Systems” in Martin Bronfenbrenner’s papers at Duke University. According to his c.v. he would have still been a professor at Carnegie Tech at that time and there is no mention of a visiting professorship at Chicago. As it turns out, I was correct in presuming that this was not a course taught by Bronfenbrenner. The Head of Research and Instruction of the Special Collections Research Center at the University of Chicago Library, Catherine Uecker, consulted the course timetable for the spring quarter 1970 and found that the instructor was Professor Gerhard Emil Otto Meyer.

_______________________

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

GRADE REQUIREMENTS:

a) term paper
b) final examination

TENTATIVE READING LIST (subject to some changes)

Note: All readings except those labelled as “optional” (Opt.) are required. Each student is expected to read, in addition to all required readings, some agreed-upon optional readings which may, but need not, be taken from the list below. The following readings are more or less systematically listed, not in the order they will be assigned.

Karl Marx

Capital, vol. I, chs. 4-9; 11-12; 15 (sec. 1-7); 16-19; 25 (sec. 1-4); 32 (chs. 10 and 24 optional).

The Communist Manifesto
Wage-Labor and Capital
Value, Price and Profit
Critique of the Gotha Programme
[These four readings are available in many editions; conveniently combined in K. Marx and F. Engels, Selected Works (paperback, International Publishers)]

The Economic and Philosophic Manuscripts of 1844, trans. By M. Milligan (International Publishers), pp. 65-91, 106-131 (pp. 132-164 optional)

Marx’s “Enquête Ouvrière” (mimeographed)

Interpretive Materials on Marx’ Theory (in general, and on Labor-Capital Relations in particular)

Sweezy, Paul M., The Theory of Capitalist Development, Introduction and chs. 1-5 (optional, recommended for those who need a general survey of Marxian “economics”)—or

Ernest Mandel, Marxist Economic Theory (2 vols.), ch. 1-5 (optional-alternative to Sweezy)

Sowell, Thomas, Marx’s “Increasing Misery Doctrine” (mimeographed)

Avineri, Shlomo, The Social and Political Thought of Karl Marx chs. 2-4 and 6 (opt.)

Lefebvre, Henri, The Sociology of Marx, ch. 4 (opt.)

Dahrendorf, Ralph, Class and Class Conflict in Industrial Society, ch. I (opt.)

Modern Economic Theory (especially Wage and Employment Theory):

Hicks, J.R., Theory of Wages (selections) (opt.)

Douglas, Paul H., Theory of Wages (selections) (opt.)

Robertson, D.H., Lectures on Economic-Principles, vol. II, (selections) (opt.)

Modern Sociological Theory with special regard to Problems of Class, Work and Alienation)

Dahrendorf, Ralph, (see above under B), ch. 2 ff. (opt.)

Bendix, R. and S.M. Lipset, Reader on Class, Status and Power (First and Second Editions) (selections) (opt.)

Arendt, Hanna, The Human Condition (selections) (opt.)

Bell, Daniel, The End of Ideology, esp. chs. 12 and 16 (Opt.)

Ruitenbeck, H.M. (ed.), Varieties of Modern Social Theory (selections) (opt.)

Blauner, Robert, Alienation and Freedom (selections) (opt.)

Josephson, E. & M., (ed.), Man Alone. Alienation in Modern Society. (selections) (opt.)

Marxian and Modern Theory Confronting Each Other

Horowitz, David. (ed.), Marx and Modern Economics, pp. 68-116 (other essays opt.)

Robinson, Joan, An Essay on Marxian Economics (opt.)

Lange, Oskar, Political Economy, vol. I (selections) (opt.)

Schumpeter, Joseph, Capitalism, Socialism and Democracy, part I (opt.)

Aron, Raymond, Main Currents in Sociological Thought, vol. I, pp. 107-180 (opt.)

Kerr, Clark, Marshall, Marx and Modern Times (opt.)

Wolfson, Murray, A Reappraisal of Marxian Economics, ch. 1-3 (opt.) (Penguin Bks.)

Samuelson, Paul, “Wages and Interest: Marxian Economic Models” Am. Ec. Review, Dec. 1957) (opt.)

Selected theoretic and empirical materials on technological unemployment and automation (to be announced).

* * * * * * * * * * * *

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

Supplementary List of Optional Readings

1) to Section B:

Solow, Robert, “The Constancy of Relative Shares” in American Economic Review, September 1958.

Ossowski, S., Class Structure in the Social Consciousness

Wesolowski, W., “Marx’s Theory of Class Domination” in: Lobkowitz, H., ed., Marx and the Western World

2) to Section C:

Dobb, M, Wages

Rees, R., The Economics of Trade Unions (both these books are published in ‘Cambridge-Chicago Economic Handbooks’ series)
Hicks, J.R., Theory of Wages has been published in a second edition with important additions and commentary

3) to section D:

Bottomore, T.B., Classes in Modern Society (paperback)

4) to section E:

Robinson, Joan, Economic Philosophy, ch. II

Adelman, Irma, Theories of Economic Growth and Development, ch. 5

5) on technological unemployment and automation:

Lederer, Emil, Technical Progress and Unemployment (International Labour Office) 1938

Woytinsky, W., Three Sources of Unemployment (International Labor Office) 1935

Kaehler, Alfred, “The Problem of Verifying the Theory of Technological Unemployment” in Social Research, vol. II, 1935

Neisser, Hans P., “Permanent Technological Unemployment” in Am. Economic Review, March 1942, pp. 50-71

“The Triple Revolution” in Fromm, E., ed., Socialist Humanism, pp. 441-461

Marcuse, H., Five Lectures, esp. lecture V, “The End of Utopia”

Brunner, Karl, “The Triple Revolution and a New Metaphysics” in New Individualist Review, Spring 1966 (vol. 4, no. 3)

Silberman, Charles E., and the edition of Fortune, The Myth of Automation

Brozen, Yale, Automation: The Impact of Technological Change (1963)

* * * * * * * * * * * *

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

Take-home Examination:

Directions: Write two essays, one from group A (topics 1-5) and one from group B (topics 6-11). Devote approximately one hour on each essay. Return the examination to Gates-Blake 431 or 428 not later than Thursday, June 11, at 12:30 P.M. Indicate on your examination a) which kind of grade you expect (P., I. or letter grade) and b) topic of oral report or term paper you have completed or intend to write. If a member of the class wishes to obtain a letter grade (i.e. grade other than P or I) this quarter, the term paper should be handed in not later than Friday, June 12, at 5 P.M. (in G-B 431).

(In none of the topics listed below, will you be graded on the basis of the position taken by you, but rather with regard to the quality of your analysis or argument).

Group A (Choose one topic)

Topic 1. Explain (as far as possible in your own terms) what Marx means by the “wage-labor system” as distinguished from other types of social-economic organization.

Topic 2. In what respects did Marx modify (or retain) his views concerning increasing working class misery (as expressed in the Communist Manifesto) in his later writings?

Topic 3. How do, according to Marx, different kinds of capitalistic accumulation processes affect the position of wage-laborers and the general wage-labor system?

Topic 4. How does Marx conceive the end of the capitalistic system?

Topic 5. Explain the relationship between alienation, exploitation and class domination in Marx (i.e. the younger or more mature one; or both).

Group B (Choose one topic)

Topic 6. Characterize broadly the major differences in the general approach (or “method”) of Marxian theory and “modern” social science.

Topic 7. In what substantive respects do major Marxian theories appear to be paralleled (or confirmed) or contradicted by results of ‘modern’ social sciences?

Topic 8. Does the abandonment of Marx’ labor-theory of value (and the consequent particular theory of surplus value and exploitation) necessarily imply a stand in support of private property and private enterprise?

Topic 9. Assuming that Marxian (classical and present-day) and non-Marxian (“modern”) social analysis are both live options and both faced with new difficulties, problems, and tasks, how would you broadly assess the most fruitful directions(s) of “praxis”-oriented social enquiry?

Topic 10. (If you did not choose topic 5 in Group A): Restate Marx’s conception of “freedom” (with regard to its most relevant social-historical dimensions and stages) in brief contrast with alternative conceptions of freedom.

Topic 11. Choose one of the optional readings not used by you for term paper or oral report and use it either as basis for comment on Marx’ views (concerning the condition of wage-labor) or, vice versa, as object of comments from a “Marxian” point of view.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Martin Bronfenbrenner Papers, Box 23, Folder “Comparative Economic Systems a.d.”.

Image Source: From the 65th birthday dinner honoring Gerhard Meyer at Hutchinson Commons. University of Chicago Photographic Archive, apf1-04472, Special Collections Research Center, University of Chicago Library.

Tags Bronfenbrenner

Economist Market Funny Business Minnesota

Minnesota. Parody letters of recommendation. Bronfenbrenner, ca. 1961

Post author By Irwin Collier
Post date 2019-11-11

To achieve a cultural understanding of modern economics, samples of successful and unsuccessful attempts at humor by economists are valuable artifacts seeking proper interpretation. The following five parody letters of recommendation were written by an economist for whom I have achieved a sort of archival sympathy. The reader can imagine my surprise upon transcribing (especially) letter II below that casts a fairly unflattering light on its author (even allowing for his genuine satiric intent seen in the letters regarded as a whole).

Without apologies, dear colleagues, five teachable moments….

____________________

MEMORANDUM

To: Staff and Nonsense [presumably a joke at the expense of “Non-staff”], School of Business Administration, University of Minnesota
From: Administrative Assistant to the Assistant Administrator.

Subject: Letters of Recommendation.

The silly season is once more with us, when letters of recommendation are composed in connection with teaching and other positions. Five model forms are presented below. You will note that they are more than perfunctory, and show sincere interest in the candidates being recommended.

* * * * * * * * * *

I

Chairman, Department of Economics
Valley University
Death Valley, Cal.

Dear Sir:

We appreciate your inquiry regarding Dr. Wilfred (“Solid-State 880”) Jones in connection with a teaching position in Mathematical Economics and Econometrics at your eminent institution.

Minnesota is proud of Dr. Jones. In his graduate education we have established a record high marginal rate of substitution of mathematical training for native intelligence. Mr. Jones’ I.Q. was only 70 when he enrolled here. It has since been lowered systematically by special courses from the illiterate Japanese statisticians Mekura, Tsumbo, and Oshi in Summer Institutes at Swineford University. Dr. Jones has nevertheless produced a truly outstanding dissertation on the logical and topological foundations of strabismic [visual defect when both eyes are unable to focus together on an object due to an imbalance of the eye muscles] utility. This masterpiece, written under Professor Haffwitz’ [“half-wit”] O.N.R. research grant, explains not only the purchase of naval surplies [sic, either “supplies” or “surplus” or a deliberate synthesis] by cross-eyed and schizophrenic naval officers, but also the consumer behavior of civilian Siamese Twins.

The psychological trauma and Parrot Fever [disease humans can catch by inhaling bacteria from shed bird-feathers] involved in this accomplishment by a man with Dr. Jones’ handicaps have had their effects upon his personality. He started his graduate career a typical dead fish [a cold, nonresponsive person] wrapped in wet blankets [as in a wet blanket used to smother a fire, i.e. a kill-joy]. As his nickname indicates, he has been accused of becoming a desiccated robot, but we can assure you that he is not only clinically alive but likely to remain so for some time.

There are certain definite advantages to Valley University in employing Dr. Jones. Since he can no longer talk, there is no need to stockpile other econometricians or mathematical economists for him to talk to. Also, unlike many new Ph.D.s completely helpless without electronic computers, Dr. Jones can and does count on his fingers. (Also on his toes, when his shoes and stockings are taken off.)

We have humanitarian reasons for wishing particularly to place Dr. Jones at Valley University. The rigor of his Minnesota training has impaired his ability to come in out of the rain, but it never rains in Death Valley.

Cordially yours,

* * * * * * * * * *

II

Head, Division of Social Studies and Humanities
Everglades College and Seminary
Dismal Swamp, Fla.

Dear Sir:

Minnesota is delighted to hear of your interest in our Mr. Ebenezer Akubongo to teach Social Science, Economic Principles, Economic Development, Alligator Husbandry, and allied subjects at Everglades. Mr. Akubongo is perhaps the most under-developed economist in any American graduate school, just as Everglades is the most under-developed college in the country. Mr. Akubongo and Everglades fit each other very well, especially since, you tell us, Immigration Service agents have been unable to penetrate the Everglades as far as Dismal Swamp. It would be to everyone’s advantage, we are sure, for you to modify your segregationist policies in Mr. Akubongo’ s favor provided that, as you propose, he assumes full-time janitorial responsibilities in addition to your customary 24-hour weekly teaching load.

Mr. Akubongo was born in Karra-Wanga, one of the Cannibal Islands. Well-intentioned missionaries secured him a scholarship to the Minnesota Bible College in Minneapolis, but he found himself on the wrong side of University Avenue and enrolled here instead. (We have not yet determined why the University admitted him.)

Mr. Akubongo’s Americanization has been proceeding apace for the past decade. He now wears shoes and headgear habitually during the winter months. His few recent reversions into cannibalism have been inspired by succulent milk-fed Minnesotans under the age of five. (We have no evidence that he would eat a Florida Cracker [Note: not necessarily intended as a racial epithet for a white person. Apparently also a self-description by families having lived generations in Florida] or Seminole Indian of any age, but perhaps you should pay him somewhat above the usual church-related-college scale, for insurance purposes.) Although he still has communication difficulties with others, we have reason to believe that Mr. Akubongo himself understands more than half of what he says in English. After bringing to this country his wife and four children, Mr. Akubongo was passed in his M.A. examinations on his third attempt. He now has two wives and eight children, and may pass his Ph.D. examinations on his nth attempt. His thesis, however, will be delayed until September, as explained below.

Mr. Akubongo is writing his doctoral thesis on the Economic Development of Karra-Wanga, and has been waiting for Karra-Wangan source materials. Their receipt involves certain difficulties; Analgesic [drug to relieve pain], the literary language of Karra-Wanga, has not been reduced to writing. Mr. Akubongo, however, is willing to compose his own source materials to whatever extent necessary to meet a reasonable thesis deadline.

In reply to your query regarding Mr. Akubongo’s loyalty to the Free Market and the American Way of Life, we doubt that Mr. Akubongo has ever had any ideas of any kind relating to these subjects. If he had, he could express them only in Karra-Wangan, which could not be understood by your students, trustees, and American Legion post. Your cherished traditions of economic freedom (which Minnesota shares with you) are therefore entirely consistent with your employment of Ebenezer Akubongo.

Sincerely yours,

* * * * * * * * * *

III

Dean, School of Business
Hog Hollow State College
Hog Hollow, Mo.

Dear Mr. Dean:

We hear you have a vacancy in General Business, and present the name of Mr. August Dummkopf Sitzfleisch as the most vacant candidate available here or anywhere else. Gus’ devotion to Business and Education may be known to you, since your school is largely responsible for him. Unable to qualify as an Office Boy after High School graduation, he tried twice more after B.S.B. [probably “Bull-shit Bachelor”] and M.B.A. degrees from Hog Hollow State. Two more failures discouraged him not; Gus will receive his Ph.D. in Business Administration at Minnesota this June, but his age now disqualifies him for Office Boy positions and he plans to teach instead. We feel that you should have the first opportunity to hire Gus, since it was your recommendation which first won him admission to our doctoral program. If you do not hire him, we should be glad to do so ourselves—except for our reluctance to inbreed. This leaves the C.I.A. and F.B.I. as Gus’ last resorts, if you reject him now.

Gus’ record in useless abstract theory has, we admit, not been exactly outstanding but even here his manner of expressing himself has won widespread admiration. Whatever he says and writes in such courses manifests the usual effects of overindulgence in alcohol and opium derivatives, but Gus has satisfied our Dean of Students, our Health Service Psychiatrist, and several campus clergymen that the cause is pure and simple confusion! Gus has done better in such applied courses as Salesmanship, Office-Boymanship, Pickpocketry, Embezzlement, and Fraud. He has worked his way through school by practical experience in certain of these fields, and become a specialist in the production and distribution of automobile license plates in several communities. [i.e., has served time in prison, manufacturing license plates]

Gus’ Ph.D. thesis leans heavily, we are proud to say, on Professor Sodapopopoulos [“Soda-pop”-opoulos] famous course in Research Methodology in Business and Economics. Here he learned to use not only Scissors and Paste, but scotch Tape and Thermofax as well. The resulting 1500-page thesis, weighing 25 pounds (bound), which took Gus six years to write, is a veritable gold mine of case materials on all aspects of Business Administration. It is organized along strictly stochastic and aleatory [literally, “dicey”] lines, and unfortunately lacks an Index. Its French title, “Collage Commerciale,” which has no precise English equivalent, bears witness to Gus’ literary and artistic culture, unusual in most doctoral candidates in this field.

Forever thine,

* * * * * * * * * *

IV

Personnel Office,
Minnesota Manacle, Mace, and Maul Company
Mayhem and Massacre Roads, WSE
Minneapolis, Minn.

Fellow-Americans!

The Industrial Relations Center is disappointed at your reluctance to include Simon Legree II in your distinguished organization. Perhaps you will reconsider after we answer the questions you have raised about the Center itself.

In the first place, Si is a hundred-percent 4-M type. He once killed a man with a whip at his fraternity initiation. After exhausting his athletic eligibility, he put himself through school at Minnesota as a masked wrestler, under the name of “Mr. 4-M.” What greater proof do you need?

It is true that our milk-and-water State Legislature makes the Center provide training for labor agitators as well as personnel men. But these classes are not given at the same time, so red-blooded Americans are protected from contamination. It is also true that University rules require management people to take a few courses in parlor-pink “social science” outside the Center’s jurisdiction but before each class of this sort we supply sleeping pills, for your protection as well as their own.

Only one professor within the Industrial Relations Center teaches both personnel men and labor fakers. This is Professor Adolf Hitler K.M. Doppelganger, but I know your criticism of Professor Doppelganger is unfair. His heart is in the right place. Every Monday and Wednesday night he re-reads the collected works of Henry Hazlitt and also his file of the Reader’s Digest, so the Commies cannot lead him astray next day. He spends every week-end painting swastikas on synagogues somewhere in the Twin Cities. He spends every Summer in Mississippi setting up White Citizens’ Councils all over the State. Next year he will go to Spain and West Germany on sabbatical leave, helping the Government hold the line against Communist subversion by agents of the Kremlin.

Under these circumstances, I know you will want to withdraw your attacks upon Professor Doppelganger, whose distasteful affiliations with Leftist organization have been undertaken only at the special request of the House Un-American Activities Committee. And then, once Professor Doppelganger’s true position is clear, won’t you give Si Legree a personnel-office job? He lives just to be a 4-M man, and to honor the best traditions of the Industrial Relations Center in its own home town.

Yours for Free Enterprise!

* * * * * * * * * *

V

Local 1, Organizers Union
Communist Party of U.S.A.
State Department
Washington 25, D.C.

Comrades!

The Industrial Relations Center is disappointed at your reluctance to include Jefferson Lincoln Washington in your revolutionary vanguard. Perhaps you will reconsider after we answer the questions you have raised about the Center itself.

In the first place, Jeff is a hundred-percent C.P. type. He once killed a scab with one blow of his fist on the picket line. After exhausting his athletic eligibility, he put himself through school at Minnesota as a masked wrestler, under the name of “Red October.” What greater proof do you need?

It is true that our reactionary State Legislature makes the Center provide training for Fascist bloodsuckers as well as leaders of the toiling masses. But these classes are not given at the same time, so single-minded revolutionaries are protected from contamination. It is also true that University rules require revolutionary proletarians to take a few courses in bourgeois “social science” outside the Center’s jurisdiction, but before each class of this sort we supply sleeping pills, for your protection as well as their own.

Only one professor within the Industrial Relations Center teaches both fighters for labor’s rights and their mercenary exploiters. This is Professor Karl Marx A.H. Doppelganger, but I know your criticism of Professor Doppelganger is unfair. His heart is in the right place. Every Tuesday and Thursday night he re-reads the works of Nikolai Lenin and his file of Masses and Mainstream, so the Fascists cannot lead him astray next day. He spends every week-end photographing R.O.T.C. preparations for the Cuban invasion somewhere in the Twin Cities. He spends every summer in Mississippi organizing Freedom Riders all over the State. Next year he will go to Hungary and East Germany on sabbatical leave, helping the People’s Democracies hold the line against capitalist subversion by agents of Wall Street.

Under these circumstances, I know you will want to withdraw your attacks upon Professor Doppelganger, whose distasteful affiliations with Rightest organizations have been undertaken only at the special request of the Soviet Embassy. And then, once Professor Doppelganger’s true position is clear, won’t you give Jeff Washington an organizing job? He lives just to be a C.P. organizer, and to honor the best traditions of the Industrial Relations Center in the nation’s capital.

Yours for the Revolution!

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Martin Bronfenbrenner Papers. Box 7, Folder “McCarthyism, 1953-62”.

Image Source: Martin Bronfenbrenner. University of Minnesota Archives/Libraries/Umedia.

Tags Bronfenbrenner

Columbia Exam Questions

Columbia. Exam questions for prospective PhD candidates, Jan 1949

Post author By Irwin Collier
Post date 2018-06-30

An earlier post provides a transcription of questions from the corresponding May 7, 1949 exam given to prospective Ph.D. candidates in economics. That May exam was fished from the papers of Albert G. Hart and had only 29 questions. The January exam below comes from Martin Bronfenbrenner’s paper and consists of 46 questions. In both cases the examinees were to select five questions to answer. The large difference in the number of questions might be due to a missing page, but I suspect it has something to do with the number of prospective Ph.D. candidates taking the exam.

_______________

EXAMINATION
for
PROSPECTIVE CANDIDATES FOR THE DEGREE OF PH.D. IN ECONOMICS

(January 8, 1949, 2:00 p.m. to 5:00 p.m.)

Questions on Specific Areas of Economic Study

Answer any FIVE but NOT MORE THAN FIVE questions.

Write all answers legibly in ink or on a typewriter.
Begin each question on a fresh sheet of paper. Write your name on all sheets used.
Be as specific as the question permits.
Be sure that your statements are relevant to the question.
Allow yourself time to reread your answers before handing in the sheets.

__________________

What characteristics of the U.S. population in 1935 and what major features of the original Social Security Act produced the controversy over full reserve vis-à-vis pay-as-you-go financing? What in your judgment is the strongest argument in support of each position?
Analyze the relationship of the Keynesian aggregate consumption function to the consumption functions of individuals.
“The legislation of 1933-1935 virtually put the Federal Reserve Board out of business as a policy agency.” Evaluate this assertion and state why you either accept or reject it.
It is argued that any serious step to control the present inflation in this country would precipitate an even more costly depression. Do you agree? Why, or why not?
Discuss the nature and causes of the “grain problem” that prevailed in the USSR on the eve of the First Five Year Plan.
To what extent do prices in the USSR correspond to and to what extent deviate from “labor value”?
Discuss the nature and merits of the so-called “value of the service” principle of utility and railroad rate making as distinct from the “cost of service” principle.
Discuss the arguments for and against a public policy of subsidized rural electrification. Assume, for the purpose of the discussion, that without a subsidy only 60% of the farms of the country in question will be electrified.
Write a commentary on the following statement appearing in a recent book on appraisal:
“Modern writers in business finance have greatly clarified the problem of valuation by insisting that, with exceptions presently to be noted, the value of an enterprise is dependent entirely on prospective earnings.”
Compare the factors influencing the relative quantities of different agricultural commodities produced in (a) Russia, (b) England, (c) New Zealand or Australia, and (d) any tropical area.
Discuss, with examples, the influences affecting the speed and pattern of industrialization.
Define marginal productivity and discuss the conditions necessary, if the factors of production are compensated on that basis, to the result that the sum of the shares should equal the total product.
Define elasticity of demand, distinguishing price elasticity and income elasticity, and outline briefly the problems affecting the degree of success which is practicable in trying to measure such elasticities.
Discuss the “just price” in relation to market price, in medieval economic thought.
Write a critique of Veblen’s theory of business cycles.
Trace the reasons for the balance of payment difficulties of Great Britain since 1945.
Discuss Soviet legislation on collective farms (kolkhoz) enacted after the publication of the model statute of an agricultural artel in 1935.
Imagine yourself a capitalist in about 1830 with money to invest in manufacture. What considerations would influence your decision whether to put your money into manufacturing in Great Britain or into manufacturing in the United States?
“The businessmen alone could not overthrow them; nor could they flourish under them. Therefore the peasants had to be called in, as well as the labor groups. The movement was thus enlarged into one of the great revolutionary movements of history, uniting interests and schools of thought ranging from millionaires to Communists; but it went forward raggedly because businessmen, peasants, and labor did not want exactly the same things and did not want to move forward at the same speed.” This is from Owen Latimore’s discussion of the Chinese Revolution. What modifications would need to be made to turn the statement into a serviceable description of the American Revolution?
Differentiate the various sacrifice theories of equity and point out their implications for progressive taxation.
Some economists hold that “the business cycle” came to an end with 1914 and that subsequent economic fluctuations are of different character. Do you agree? Why, or why not?
Do you believe that Federal Reserve policy in 1946-1948 was helped substantially in resisting inflation? Explain with reference to open-market operations, interest rates, reserve requirements, and handling of Treasury cash balances.
Discuss the major changes that have occurred in the structure of prices in the United States since the outbreak of the First World War. Note important alternations in terms of exchange, and comment on the implications of these shifts. Appraise 1948 price and wage relations, with reference to earlier standards.
To what extent is the theory of demand, as it applies to competitive conditions, open to testing? Discuss the chief attempts that have been made to establish demand functions empirically.
What are the objectives of correlation analysis? What are the chief measurements needed to define the relationship between two variables? What is the relation between correlation and causation?
Enumerate the main items, or groups of items, that make up a country’s balance of international payments. Then explain what is meant by “equilibrium” or “disequilibrium” in the balance of payments.
Does the doctrine of comparative costs (in any of its various formulations) depend on the assumption of full employment? How, if at all, does unemployment affect the case for international specialization and exchange?
Describe the uses of money in pre-literate society and the manner in which they may be found to be institutionalized separately.
Discuss the view according to which capitalism developed in Western Europe in the course of a more comprehensive process involving the nationalization of the major fields of social activity.
How would you explain the fact that short-term interest rates have been sometimes higher, sometimes lower, than long-term rates?
How does the retention of income by corporations affect economic stability?
Explain the factors responsible for the sharp rise in worker productivity in agriculture, 1940-1948.
Discuss the problems which arise in attempting to apply the theory of the firm under conditions of pure competition to the actualities of, say, an Iowa corn-hog farm of 250 acres.
State the points at issue in the treatment of the government sector in the national income accounts, and evaluate the alternative methods of computation.
Give a critical appraisal of von Mering’s book on The Shifting and Incidence of Taxation.
Why did industries such as steel and cement adopt the basing-point price system?
What does it mean to say that utility is measurable or non-measurable? Is it measurable?
Explain and comment on three of the following characterizations of money interest:
1. Interest equals the marginal rate of time preference.
2. Interest reflects a discount of future satisfactions.
3. Interest reflects the marginal productivity of capital.
4. Loss of interest is the price of liquidity.
5. Interest reflects the rate at which aggregate capital grows.
6. Interest is the appropriation by the banks of the profits inherent in the power to coin money.
7. Interest on money loans is a sinful exploitation of the needs of the distressed.
The assumption, frequently made in partial analysis, that the marginal utility of money is a constant
1. implies
2. is compatible with
3. is inconsistent with
4. is synonymous with

the further condition that one or more of the goods being considered is an inferior good. Explain your answer.

Under static conditions, one is more likely to encounter “perversely” sloping supply curves than “perversely” sloping demand curves. Why?
Explain the materials and methods available historically for comparing unemployment in the United States and England.
Discuss the pros and cons of industry-wide bargaining.
What specific problems of federal and state taxation are presented by insurance companies?
Define income-elasticity, cross-elasticity, and “own-elasticity” (Marshallian concept) of demand. Explain their interrelations and place in economic theory. Show how each can be determined for a given consumer if we are informed about his indifference-surface.
Discuss the contribution to knowledge of business cycles made by recent empirical studies.
State the relation between marginal productivity and prices of productive services under perfect competition. Reformulate this statement to make it correct under assumptions (a) that the employer is a monopolist; (b) that he is a monopsonist (i.e., can influence his buying-prices by the scale of his purchases); (c) that he is both at once. Reformulate further to give a general statement applying to these cases as well as to that of perfect competition.

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Martin Bronfenbrenner Papers, Box 23, Folder “Exams: comprehensives 1949-73”.

Image Source:“Library Columbia University, New York City” The Miriam and Ira D. Wallach Division of Art, Prints and Photographs: Picture Collection, The New York Public Library. New York Public Library Digital Collections. Accessed June 30, 2018.

Tags Bronfenbrenner

Chicago Problem Sets

Chicago. Henry Simons’ classic problem set, 1933.

Post author By Irwin Collier
Post date 2018-04-10

According to Martin Bronfenbrenner, the following problem set devised by Henry Simons for Chicago undergraduates in 1933 was a pedagogical Meisterstück (ok, he just said “one of the most famous problems in economic pedagogy”). It is likely that Paul Samuelson, who considered Simons his best teacher at Chicago, cut his teeth on this problem set as well.

________________

Economics 65-165

M. Bronfenbrenner

A General Problem in Competitive Price

This problem was originally devised by the late Professor Henry C. Simons for Chicago undergraduate classes in 1933. It has lived on to become one of the most famous problems in economic pedagogy. Give yourself plenty of time to work with it. It is not only long but abounds in pitfalls.

There are 1000 firms in a highly competitive industry which produces a standardized product. Each firm owns and operates one plant, which is of the most efficient size. All firms have identical costs, as follows:

Output per week	Total Cost		Output per week	Total Cost
Output per week	Fixed	Variable	Output per week	Fixed	Variable
1	$100	$10	13	$100	$101
2	100	19	14	100	113
3	100	27	15	100	126
4	100	34	16	100	140
5	100	40	17	100	155
6	100	45	18	100	171
7	100	50	19	100	188
8	100	56	20	100	206
9	100	63	21	100	225
10	100	71	22	100	245
11	100	80	23	100	266
12	100	90	24	100	288

The demand curve for the industry is given by: pq = $255,000. Your first task is to make out a demand schedule, and incorporate it in your solution as Appendix 1.

Part i

Draw the supply curve (the sum of the marginal cost curves) and the demand curve of the industry on the same graph (Fig. 1). Read off the equilibrium price and quantity. Prove that your answer is correct by comparing quantities supplied and demanded at prices $1.00 higher and $1.00 lower.

Draw the cost and demand curves of the individual firm on the same graph (Fig. 2). Accompany both graphs (Fig. 1-2) with textual explanation of their construction and of any differences between them.

Part ii

Congress unexpectedly imposes a tax of $4.00 per unit on the manufacture of this commodity. The tax becomes effective immediately and remains in effect indefinitely. Assume:

a. No changes in the economic system other than those attributable to the tax.
b. No change due to the tax has any effect on the prices of productive services used by the industry. (This assumption will be dropped later.)

Draw the new supply curve and the demand curve of the industry (Fig. 3). Read off the new equilibrium price.
Draw the new cost curves and the demand curve of the individual firm (Fig. 4). Explain the construction of these graphs (Fig. 3-4).
Why can the price not remain as low as $15?
Why can the price not rise to and remain at $19?
Precisely what would happen if the price remained for a time at $16?
At precisely what level would the price become temporarily stable? What does it mean to say that this is an equilibrium level?
Suppose the short-run equilibrium price to be $17. How would you answer the query:

“I don’t see why every firm should produce 15 units per day when the price is $17. It would make just as much if it produced only 14, for the 15^thunit adds just as much to expenses as it adds to revenues.” Precisely what would happen if some firms produced 14 units per day and others 15 units?

Would short-run equilibrium be reached at a higher or lower price (and with larger or smaller output) if the elasticity of demand were lower (less than unity? If it were higher (greater than unity)?
What would happen if demand had an elasticity of zero? An elasticity of infinity?

Part iii

As Figure 4 will reveal, the new minimum average cost is $19. The short-run equilibrium price was $17; hence this industry becomes unattractive as an investment, relative to other industries. As plants are worn out, therefore, they will not be replaced; plants will be junked sooner; and even maintenance will be reduced. To simplify the problem, we assume:

Each plant has a life of 1,000 weeks.
The plants in the industry are staggered so that, at the time the tax was imposed, there is one plant 1 week old, one plant 2 weeks old, etc.
At the time the tax was imposed, 20 plants were so near completion that it is impossible to divert them to other uses. These are completed at one-week intervals.

Hence for 20 weeks the price will stay at $17, and then rise gradually as entrepreneurs fail to replace worn-out plants.

What will the situation be at the end of the 25^thweek? (Answer in terms of “greater than” or “less than.”)
When 120 weeks have passed (900 plants left), will the price be above or below $18? Explain carefully.
How many weeks must pass (how many plants must be scrapped) before the price rises to $18? Explain precisely.
Will the output per plant increase or decrease as the number of plants declines?
When 220 weeks have passed (800 plants left), will the price be above or below $19?
How many plants must be scrapped before the price rises precisely to $19?
What would the price be if the number of plants declined to 750? What would be the output per plant? What would happen to the number of plants?
What happens to the short-run supply curve of the industry as the number of plants diminishes? Draw, on the same graph (Figure 5), the supply curve when there are 1,000 firms and 800 firms. Compute elasticities of supply for these two curves at a given price.
How could the process of adjustment, and the final equilibrium, be different.
1. If the elasticity of demand were greater than unity?
2. If the elasticity of demand were less than unity?
  (The significant points are: (1) price, (2) output per plant immediately after the tax is imposed, and (3) number of plants and total output at the new long-run equilibrium).

Part iv (Optional)

Finally, the prices of the productive services will be affected by the purchases of the industry. Some of the services will be specialized: Larger quantities can be secured only at higher prices, and smaller quantities can be secured at lower prices. Assume that all of these services are “fixed”, and that all variable services are unspecialized (i.e., any quantity can be secured by the industry at a constant price).

Will the short-run effects of the tax be any different than they were in Part 2? Explain in detail.
How will the long-run adjustment differ? Will the final price be more or less than $19, and the daily output more or less than 13,421? Again explain in detail.
Suppose that a special and scarce kind of land is required for production of the taxed commodity, and that this land is not used (or within practicable limits usable at all) in the production of any other commodity, and that all other resources are completely unspecialized. What is likely to be the effect of the tax on the price of the use of such land (on its rent)?
Suppose that this special and scarce land is also used in one other industry. Will the rent of this land fall more or less, if the demand for the product of this second industry is elastic or inelastic?

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Papers of Martin Bronfenbrenner, Box 26, Folder “Micro-econ & Distribution, 1958-67, n.d. 2 of 2”.

Image Source: Henry Calvert Simons portrait at the University of Chicago Photographic Archive, apf1-07613, Special Collections Research Center, University of Chicago Library.

Tags Bronfenbrenner, Simons

Chicago Economists

Marxian economics. Letter exchange of Konüs and Bronfenbrenner, 1966

Post author By Irwin Collier
Post date 2018-03-06

Today’s post is a touching reunion after some thirty years of the minds of the American economist, Martin Bronfenbrenner (Chicago Ph.D., 1939) and the Russian mathematical economist Alexander A. Konüs. As far as I know these two scholars never actually met. The first time Bronfenbrenner encountered work of Konüs was in helping to prepare a translation of a 1924 paper by Konüs written in Russian that Henry Schultz was interested in. That paper, but especially its translation that was published in Econometrica in 1939 after Schultz’s death, has become one of the classics in the theory of cost of living indexes. The winding path of the paper from the Moscow Economic Bulletin of the Institute of Economic Conjuncture to Econometrica is described in Schultz’s introduction:

Konüs paper was published in Russian in 1924, and thus far our only knowledge of it has been the incidental, though appreciative, observations regarding it in Bortkiewicz‘s review of Haberler‘s book on index numbers published in 1928. It is this inadequate summary of Bortkiewicz which Staehle used in 1934 in his important work on international comparisons of cost of living and which constitute a point of departure for his own researches.

From my first reading of Dr. Staehle’s manuscript I got the feeling that there was more to the Konüs condition than was evident from the Staehle-Bortkiewicz statement of it, but could not afford the time to look into the matter. In 1934-35, however, I was called upon to prepare a few lectures on the bearing of the modern theory of utility and exchange on the problem of index numbers, and I decided to look into the original paper by Konüs. Not being able to read Russian, I had a translation prepared of it which has been used in my classes since then.*

*I am grateful to the following graduate students for their reports on various aspects of index-number theory: Miss Fredlyn Ramsey, Mr. Orvis Schmidt, Mr. Martin Bronfenbrenner, Mr. Jacob L. Mosak, and Mr. H. Gregg Lewis.

Source: Henry Schultz, A Misunderstanding in Index-Number Theory: The True Konüs Condition on Cost-of-Living Index Numbers and Its Limitations, Econometrica, Vol. 7, No. 1 (Jan., 1939), pp. 1-9.

Some three decades later, Bronfenbrenner and Konüs exchanged letters on the subject of modern adaptations of Marxian economic theory and Martin Bronfenbrenner reveals some of his family history.

_____________

Letter from Alexander Konüs to Martin Bronfenbrenner
7 July 1966

Dear Professor Bronfenbrenner,

It was a pleasure for me to know that the author of the pro-marxist article in the “American economic review” with the significant subtitle “Cuius regio eius religio” (translation: the religion of the ruler of the realm is the religion of the realm) [“Notes on Marxian Economics in the United States” AER Dec. 1964 ] is the praticipator [sic] of the excellent translation into English of my paper of 1924. I am greatly indebted for this translation to you and to Dr. Jacques Bronfenbrenner.

Your article “A macroeconomic translation of capital”, the reprint of which I received with gratitude, and the article “The Marxian macroeconomic model” in “KYKLOS”, vol. XIX-1966-Fasc. 2, are very interesting and important. I have delayed to communicate you my comments because I thought that my attitude to some points of your paper is obvious from the “Notes to articles by L. Johansen “Labour theory of value and marginal utilities” the reprint of which I sent you (“Economic of planning”, vol. 4, N 3, 1964).

As you could see in my “Notes” the problem is not the “translation” of the “Capital” but rather the “revision” of the 3-d volume to some degree from the point of view of modern economics.

The first key stone of this “revision” was laid by L.v.-Bortkiewicz in his “Zur Berichtigung der grundlegenden theoretischen Konstruction von Marx im dritten Band des “Kapital” (“Jahrbücher für Nationalökonomie und Statistik”, III Folge, B. 34, H. 3, 1907). [English Translation] The main assertion of Marxist labour theory of value is: “the sum of the profits in all spheres of production must equal the sum of the surplus values and the sum of the social product equals the sum of its value” (“Capital”, vol. 3, ch. X). So Bortkiewicz has proved that this assertion is valid only in the case when organic composition of advanced capital is the same in all departments and when consequently the prices coincide with values.

Bortkiewicz’s conclusion is considered, for example by Hans Peter (“grundprobleme der theoretischen Nationalökonomie”, 1933), as the failure of the labour theory of value. As to me I should like to attract the attention to the fact that Marx himself did not publish the theory of prices of production (although he assumed it more than twenty years) because he did not think this theory sufficiently perfect.

The new approach developed in my “Notes to the article by L. Johansen “ is cleared up if we will take into consideration the supposition in one of the models of professor Michio Morishima: “…capital goods are not subject to purchase and sale, only their services being traded on the market” (Equilibrium Stability and Growth”, 1964, p. vii).

Then instead of “depreciation of fixed capital instruments involved in producing W´´ the constant part of advanced capital C in your equations must include the rents paid for the use of durable capital goods as the prices of these goods compared with their values.

Consequently the source of the profit of the owners of buildings and machinery is in the surplus labour spent during their production (the conditions of reproduction are implied).

The main thing is that the exchange value of a commodity is realized not in its sale but in the process of realization of its use value, i.e. in its consumption.

Another basic conception is that the organic composition of advanced capital is not dependent on its technical composition but it is affected by economic considerations.

The equality of values and prices follows immediately from your equations based on Marx’s transformation:

(1) ${{w}_{1}}={{c}_{1}}+{{v}_{1}}+{{s}_{1}}\text{ ;}$ (2) ${{w}_{2}}={{c}_{2}}+{{v}_{2}}+{{s}_{2}}\text{ ;}$

(3) ${S}'=\frac{{{s}_{1}}}{{{v}_{1}}}=\frac{{{s}_{2}}}{{{v}_{2}}}\text{ ;}$ (4) ${P}'=\frac{{{s}_{1}}{{p}_{1}}}{{{c}_{1}}+{{v}_{1}}}=\frac{{{s}_{2}}{{p}_{2}}}{{{c}_{2}}+{{v}_{2}}}\text{ ;}$

— if we add to them the well-known equations which tie together the rate of profit (P´) with your expressions of return of capital (s₁p₁, s₂p₂) and of the price of production (w₁p₁, w₂p₂):

${{s}_{1}}{{p}_{1}}=\frac{{{w}_{1}}{{p}_{1}}}{\left( 1+P \right)}{P}'\text{ ;}$ ${{s}_{2}}{{p}_{2}}=\frac{{{w}_{2}}{{p}_{2}}}{\left( 1+P \right)}{P}'\text{ .}$

Therefore Hans Peter and Paul Sweezy, following Bortkiewicz, reject Marx’s reasoning. For example Sweezy writes:

“The source of Marx’s error is not difficult to discover. In his price scheme the capitalist’s outlays on constant and variable capital are left exactly as they were in value scheme, in other words, the constant capital and the variable capital used in production are still expressed in value terms. Outputs, on the other hand, are expressed in price terms. Now it is obvious that in a system in which price calculation is universal both the capital used in production and the product itself must be expressed in price terms. The trouble is that Marx went only half way in transforming values into prices”. (The theory of capitalist development, 1942, p. 115).

The right transformation of values into prices according to Bortkiewicz will be as follows.

The equations (1), (2), (3) and, instead of (4),

(4´) $1+{P}'=\frac{{{w}_{1}}{{p}_{1}}}{{{c}_{1}}{{p}_{1}}+{{v}_{1}}{{p}_{2}}}=\frac{{{w}_{2}}{{p}_{2}}}{{{c}_{2}}{{p}_{1}}+{{v}_{2}}{{p}_{2}}}\text{ ;}$

besides that:

(5) ${{w}_{1}}{{p}_{1}}+{{w}_{2}}{{p}_{2}}={{w}_{1}}+{{w}_{2}}\text{ ,}$ and

(6) ${{w}_{1}}={{c}_{1}}+{{c}_{2}},\text{ }\left( {{w}_{2}}={{v}_{1}}+{{v}_{2}}+{{s}_{1}}+{{s}_{2}} \right)\text{ .}$

But in this case also the prices will be equal to values if we add the above mentioned fundamental equality of Marx’s labour theory of value :

(7) $\left( {{c}_{1}}{{p}_{1}}+{{v}_{1}}{{p}_{2}} \right)\cdot {P}'+\left( {{c}_{2}}{{p}_{1}}+{{v}_{2}}{{p}_{2}} \right)\cdot {P}'={{s}_{1}}+{{s}_{2}}\text{ .}$

Indeed, it follows from (4´), (7) and (3):

$\frac{{{w}_{1}}{{p}_{1}}}{{{c}_{1}}{{p}_{1}}+{{v}_{1}}{{p}_{2}}}=\frac{{{w}_{2}}{{p}_{2}}}{{{c}_{2}}{{p}_{1}}+{{v}_{2}}{{p}_{2}}}=\frac{{{v}_{1}}{s}'+{{v}_{2}}{s}'}{{{c}_{1}}{{p}_{1}}+{{v}_{1}}{{p}_{2}}+{{c}_{2}}{{p}_{1}}+{{v}_{2}}{{p}_{2}}}+1\text{ ,}$

${{w}_{1}}{{p}_{1}}+{{w}_{2}}{{p}_{2}}=\left( {{v}_{1}}+{{v}_{2}} \right){s}'+\left( {{c}_{1}}+{{c}_{2}} \right){{p}_{1}}+\left( {{v}_{1}}+{{v}_{2}} \right){{p}_{2}}\text{ ,}$

taking into account (6) and (3) we get

${{w}_{2}}{{p}_{2}}=\frac{{{w}_{2}}}{{s}'+1}\left( {s}'+{{P}_{2}} \right)\text{.}$

Hence p₂ = 1, and from (5) we get p₁ = 1.

The observed variation in organic composition of the advanced capital (c/v; c + v + s = w) is engendered by the various periods of its circulation and by the presence of the differential rent, in accordance with the labour theory of value.

In the econometric literature there are many assertions that an optimal state of economy requires the proportionality of prices of consumer goods to their values, i.e. to the amounts of labour necessary to produce them. The first author to state this idea was the Russian mathematician N. Stolarof. He published in 1902 the pamphlet: “Démonstration analytique de la formule économique: Les degrés finals de l’utilité (des products librément crées) son proportionnel à la valeur du travail” (Kiev, in Russian). Other references are in Eberkard Fells’s article “Some Soviet statistical books of 1957” (Journal of the American statistical association, v. 54, N 285, March, 1959”).

It is to be noted that there are two limitations arising from the assumption accepted in that demonstration.

First, it is impossible to determine the amounts of labour in the commodities the production of which is tied together, for example—the grain and the straw. Only the sum of their prices can be compared with the total amount of labour necessary to produce them. That is the case of the famous example of Böhm-Bawerk about the prices of new and matured wine. The labour on the vineyard is spent to produce the new and the matured wine together. The prices of these kinds of wine are proportional to their marginal utilities.

Secondly, the prices of the commodities satisfying the same needs, for example—coal and petroleum, are not mutually independent. Only the sum of the prices of the petroleum and the coal must be compared with the total amount of labour spent on the production of fuel. Here arises the phenomenon of the differential rent in oil-extracting industry.

The theory I have developed since 1929 (first publication in 1949) does not find any supporters. I think it is essentially in accordance with your ideas. Any comments and criticism will be very valuable for me.

With best wishes,

Sincerely yours [signed, A. A. Konüs] /Konüs A.A./

VII.1966

_____________

Carbon copy of letter from Bronfenbrenner to Konüs
18 August, 1966

August 18, 1966

Dr. A. A. Konüs
Box 1587, Moscow Central P.O.
Moscow, USSR

Dear Dr. Konüs:

It has indeed been a pleasure to hear from you, and to learn the extent to which our respective “modernizations” of the Marxian system overlap. I hesitate even to consider our remaining differences, since you know the Marxian literature so much better than I. On the issue of “what Marx really meant” I tend to assume, in the difficult cases, that he meant different things at different stages of his thinking, and that the important issue is what he should have meant, i.e., how can one make sense most readily from his incomplete literary remains, and how might a younger Marx have made use of modern economics.

I am likewise overwhelmed by your ability to keep up with “bourgeois” economic literature at the “Morishima” level of difficulty, in a foreign language into the bargain. You must be over 70 years of age, a time when 99.9 percent of scholars feel exempted from the labor of learning anything new. (I long for such an exemption already, and I am 20 years younger!)

Since my late father (a bacteriologist) [Jacques Jacob Bronfenbrenner] and I collaborated in translating your seminal index-number article for Econometrica [The Problem of the True Index of the Cost of Living (January 1939)] nearly 30 years ago, perhaps you would enjoy hearing some our family legends:

My father was born in Odessa; my grandfather was a chemist at one of the waterfront flour mills. During the 1905 Revolution, my father and two of his brothers engaged in liaison activity between student revolutionary groups and the Potemkin sailors. During the subsequent reaction, my grandfather was shot. My father managed to escape to Paris after two years in hiding, and one uncle escaped from a ship en route to Siberia. My father became an American citizen shortly before the first World War; my uncle became a French citizen and lives near Paris. My late grandmother, a nurse, remained in Russia. She was head of a Red Army hospital during the doctor shortage of the Civil War. My late aunt, who also remained in Russia, died during the German siege of Leningrad in 1941. A second uncle emigrated to America during the famine years of 1920-21, and died last year.

An unusually wide range of political and economic views were represented by my Russian relatives. My grandmother was a good Stalinist. My uncles, repelled by the Terror, were a-political, but generally hostile to the Soviet Government. My father was a Social Revolutionary (SR) in his youth; later, he became a follower of Kerensky; in this country, he was a Roosevelt Democrat. His economics was “maximalist.” He believed there would be no economic problem in a well-run peaceful society. (All goods people “really” wanted could be free, and produced with relatively few years of compulsory labor service.) I should describe myself as a confused and imperfectly-consistent eclectic—considerably more “bourgeois” than Marxist, in my own view.

My mother was not of Russian descent. The family’s only common language was English. I had no opportunity to study Russian, and speak no Russian whatever. My cousin [Urie Bronfenbrenner, 2005 obituary in the New York Times], on the other hand, grew up in a Russian-speaking household. He speaks the language fluently, and does liaison work between Soviet and American workers in his specialty (psychology). I have often felt some jealousy at this superior opportunities.

Sincerely yours,

Martin Bronfenbrenner
Visiting Fellow

MB:has

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Project. Martin Bronfenbrenner Papers, Box 7, Folder “Marxian Distribution Theory, n.d.”.

Tags Bronfenbrenner, Konüs

Duke Undergraduate

Duke. Reflections on the learning objectives for undergraduate economics majors. Bronfenbrenner, 1977

Post author By Irwin Collier
Post date 2017-12-14

This is a transcription of a draft of a paper that was later presented at the New York meeting of the American Economic Association (December 28, 1977) by Martin Bronfenbrenner (Chicago Ph.D., 1939). A revised version was published in Atlantic Economic Journal, vol. 6 (1978), pp. 22-25. The revision sandwiched the text below between an introductory and concluding sections. The conclusion consists of his responses to “strenuous opposition” the paper received from radical economists and faculty from small, “self-consciously ‘proletarian’ institutions.” To document the year of the draft, I have appended the comments (with date) from the Duke department of economics chair, Allen Kelley.

What struck me first upon seeing this draft was the reflection of a sexist empirical reality expressed in the subtitle of the paper. Bronfenbrenner title refers to “the person majoring in economics” as opposed to meaning major as “a particular course of study”: the published version begins with the sentence: “I view the undergraduate economics major not as a potential economist but as a potential lawyer or businessman, politician or journalist, and likewise as a potential voter.”) But the brief note is more interesting as an artifact, an older scholar’s reflections (in the late 1970’s) of what an undergraduate education in economics should be all about.

From the perspective of today, Bronfenbrenner’s inclusion of doctrinal history, 3 semesters of historical and/or current policy applications, 2 semesters of “alternative economic ideas and institutions” sounds like an early call (about forty years early to be precise) for the CORE Project.

__________________________

THE ECONOMICS MAJOR—WHAT IS HE?
Martin Bronfenbrenner, 1977 draft

We have on undergraduate campuses “Junior Ph.D.,” “Fraternity Row,” and “Split Level” major programs in Economics. As an elitist (meritocrat, intellectual snob) I want Economics to become a “Junior Ph.D.” major, along with, e.g., Mathematics and most of the natural sciences. There are plenty of alternatives open, including individual Economics courses, to playboys doing nothing and to intellectual anarchists “doing their own things.”

And so I should like undergraduate economics concentrations to include at least:

(1) Two semesters (or equivalent) of intermediate-level macro- and micro-theory of the standard sort. Doctrinal history might also fit into this group.

(2) Three semesters of quantitative techniques (mathematics at full-blown university level, statistics, econometrics, computer science, accounting). Formal requirements, such as the calculus, should also apply to the intermediate theory courses under (1) to avoid postponement to the student’s final term (which makes them meaningless).

(3) Three semesters of courses applying (1-2) to a historical record and-or to significant current problems of the U.S. and international economies.

(4) Two semesters’ exposure to “alternative” economic ideas and institutions. Radical and institutional economics naturally belong here, along with comparative systems, economic anthropology, specific studies of non-capitalist countries, etc.

(5) (For honors candidates) A “small-group learning experience” of a semester seminar which includes an honors essay. The essay should not only overcome passivity and indicate competence in some facet of undergraduate economics, but demonstrate ability at expository writing.

I have minimized reference to specific courses, since Section 1 of Public Finance, say, under Professor Jones, may be all theory and belong in Group 1, while Section 2 (Professor Brown) may be all policy problems (Group 3) and Section 3 (Professor Johnson) may fit equally well in either category. Harassed Chairmen, Executive Officers, and Directors of Undergraduate Studies will have unavoidable problems with the “nuts and bolts” of such a major, if they take their duties seriously. These problems will be lessened, of course, insofar as superior students are allowed to do whatever they like regardless of formal rules.

But before writing this proposal off as “impossible” or “Utopian” (as well as “elitist,”) please consider a few “matters in mitigation.”

(a) Economics won’t, and shouldn’t, do it all. Credit toward all the above requirements should be allowed for work in other departments. Mathematics, Computer Science and Economic History (as viewed by historians) are obvious examples. Labor Law in the Law School, History of Politics of Africa or Latin America with strong “Economic Development” or “International Economics” loadings, the History of Socialism, inter-disciplinary studies of the U.S.S.R. or Modern China, are only a little less obvious.

(b) The prospective Economics major should be encouraged to read Principles on his own, and go directly into Intermediate Theory. Alternatively, he should be shunted into a one-semester version of Principles. (Need I add that some version at least of the Principles course should be open to Freshmen?) More controversially perhaps, I also believe that the Principles course should be aimed primarily at non-majors, and modeled more frequently on the legendary “Physics for Poets” than on cram courses for Ph.D. qualifying examinations.

(d) And finally, I think the universities yielded too much on course requirements to the student activism of 1967-71. Reduction of the standard 5-course load to 4 courses, I recall, was proposed to promote student creativity and student participation in the real-world off-campus community. Well, it didn’t work that way. (And thank God, say I, whenever I read a student newspaper!) The 5-course normal load, I accordingly suggest, should be restored at least for the Sophomore and Junior years. Freshmen in process of culture shock, and Seniors in process of job-hunting, might well be left alone with the 4-course load.

MARTIN BRONFENBRENNER
Duke University

__________________________

Comment on draft by Allen Kelley, Chairman of the Duke Department of Economics

Department of Economics
Duke University

Chairman [Allen Kelley]
August 31, 1977

Dear Martin,

Dave Davies passed along your draft of the comment for the Christmas meetings.

A couple of observations.

Why would you consider doctrinal history as a substitute for theory? I’d almost put it in your category 4.

Why so much quantitative training? Statistics I can see as a major requirement. But accounting, computer programming? The latter can be learned at a mini-pragmatic level in the stat course, where the student runs some regressions with standard packages (e.g., SPSS). Many excellent students will want to do more analytical work, and spending three of their courses on quantitative skills seems a bit excessive.

I like everything else, and especially your addition of 4. Of course, I believe in 5, and most of the students already do 3 in most majors.

A final point, one that can’t be resisted by a zealous chairman. Does the University of Colorado have to get such heavy credit—looks like a joint appointment. We Dukies want to internalize all of your great prestige!

I’ve not sent this to Japan, since it would take too long to forward back to Durham.

Welcome home.

[signed “Allen”]

Durham, North Caorlina 27706

(919) 684-2723

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Project. Papers of Martin Bronfenbrenner, Box 26, Folder “Misc”.

Tags Bronfenbrenner, KelleyA

Tributes to Thomas Mayer

AER Membership Bio, 1974

A FAIRY TALE1

By Anon Ymous2

Footnotes

List of Patinkin’s copy request for Chicago Ph.D. theses

The University of Chicago Chicago, Illinois 60637

The University of Chicago Chicago, Illinois 60637

Handwritten note at top: “Martin, Here is the outline for the Macro theory. Which part do you want to teach? [signed] Oz”

Economics 176A-B Course Outline and Suggested Readings

Summer 1970

INCOME DISTRIBUTION—M. Bronfenbrenner

HARVARD UNIVERSITY DEPARTMENT OF ECONOMICS

Economics S-222—Income Distribution Summer 1970—M. Bronfenbrenner Final Examination

Social Sciences 273 Spring 1970

“Wage-Labor and Capital” in Marxian and Modern Theory

Social Sciences 273 Spring 1970

“Wage-Labor and Capital” in Marxian and Modern Theory

Supplementary List of Optional Readings

1) to Section B:

2) to Section C:

3) to section D:

4) to section E:

5) on technological unemployment and automation:

Social Sciences 273 Spring 1970

“Wage-Labor and Capital” in Marxian and Modern Theory

Take-home Examination:

MEMORANDUM

I

II

III

IV

V

EXAMINATION for PROSPECTIVE CANDIDATES FOR THE DEGREE OF PH.D. IN ECONOMICS

(January 8, 1949, 2:00 p.m. to 5:00 p.m.)

A General Problem in Competitive Price

Part i

Part ii

Part iii

Part iv (Optional)

Letter from Alexander Konüs to Martin Bronfenbrenner 7 July 1966

Carbon copy of letter from Bronfenbrenner to Konüs 18 August, 1966

THE ECONOMICS MAJOR—WHAT IS HE? Martin Bronfenbrenner, 1977 draft

Comment on draft by Allen Kelley, Chairman of the Duke Department of Economics

Department of Economics Duke University

A FAIRY TALE¹

By Anon Ymous²

The University of Chicago
Chicago, Illinois 60637

The University of Chicago
Chicago, Illinois 60637

Handwritten note at top:
“Martin, Here is the outline for the Macro theory. Which part do you want to teach? [signed] Oz”

Economics 176A-B
Course Outline and Suggested Readings

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

Economics S-222—Income Distribution
Summer 1970—M. Bronfenbrenner
Final Examination

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

Social Sciences 273
Spring 1970

“Wage-Labor and Capital” in
Marxian and Modern Theory

EXAMINATION
for
PROSPECTIVE CANDIDATES FOR THE DEGREE OF PH.D. IN ECONOMICS

Letter from Alexander Konüs to Martin Bronfenbrenner
7 July 1966

Carbon copy of letter from Bronfenbrenner to Konüs
18 August, 1966

THE ECONOMICS MAJOR—WHAT IS HE?
Martin Bronfenbrenner, 1977 draft

Department of Economics
Duke University