Tag: Friedman

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Chicago Economists

Chicago. Milton Friedman from Cambridge to T.W. Schultz. 29 Mar 1954

About a week ago I posted Milton Friedman’s letter from Cambridge, England to T. W. Schultz dated 28 October 1953. Today we have the next carbon copy of a letter to Schultz from Cambridge in the Milton Friedman papers at the Hoover Institution in which Friedman discusses a range of issues from a one-year appointment in mathematical economics at Chicago, the Cowles’ Directorship appointment, and postdoctoral fellowships. The letter ends with a laundry-list of miscellaneous comments from Arthur Burns’ Economic Report to the President through the reception of McCarthy news in England. Friedman’s candid assessments of many of his fellow-economists make this letter particularly interesting.  More to come!

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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Milton Friedman to T.W. Schultz
29 March 1954

15 Latham Road
Cambridge, England
March 29, 1954

 

Dear Ted:

Of the people you list as possible visiting professors while Koopmans is away, Solow of M.I.T. is the one who offhand appeals to me the most. I have almost no doubt about his absolute competence: I read his doctoral dissertation at an early stage and saw something of him last summer and the preceding summer when he was spending some time at Hanover in connection with one or another of Bill Madow’s projects. He has a seminal mind and analytical ability of a very high order. My only questions would be the other that you raise, whether he is broadly enough interested in economics. And here I am inclined to answer with an uncertain yes, relying partly on the fact that he is flexible and capable of being induced. I do not know Dorfman of California either personally or through his writings. My question about him is that I believe that we would do best if we could use this opportunity in general to bring in someone with a rather different point of view and who will provide a broadening of the kind of thing done under the heading of mathematical economics, and my impression is that Dorfman is very much in the same line as Koopmans – but here too, I don’t have much confidence in my knowledge. As you know, I think very highly of both Modigliani and Christ, but as of the moment for this particular spot, would prefer Solow, partly on grounds of greater differentiation of product.

One rather harebrained possibility that has occurred to me outside your list is Maurice Allais, the French mathematical economist who is Professor at École des Mines. Allais is a crackpot genius in many respects. He came out of engineering and is largely self taught, which means he holds the erroneous views he has discovered for himself as strongly as the correct ones. I have always said that if he had, at a formative age, had one year of really good graduate education in economics he might have become one of the really great names. At the same time, Allais is an exceedingly active and stimulating person who works in mathematical economics of a rather different kind than we have been accustomed to. I think it would be a good thing to have him around for a year – both for us and him – though I am most uncertain that it would be for a longer period. I don’t have any basis for knowing whether Allais would be interested.

I have tried to think over the other European mathematical economists to see if they offer other possibilities. There are others in France: Guilbaud [Georges-Théodule Guilbaud (1912-2008)], Boiteux [Marcel Boiteux (1922-)] (I don’t have that spelled right), but none seem to me as good as Allais for our purposes. There are Frisch and Haavelmo in Norway, Wold in Sweden; of these, Haavelmo would be the best. I find it hard to think of anybody in England who meets this particular bill, and would be at all conceivable. Dick Stone? Has just been over and is not primarily mathematical but might be very good indeed in some ways. Is certainly econometric minded and fairly broadly so. R.G.D. Allen? Has done almost nothing in math. econ. for a long time.*

*[handwritten footnote, incomplete on left side presumably because carbon paper folded on the corner:   “…real possibility here is a young fellow at the London School, A. W. Phillips…invented the “machine” Lerner has been peddling. He came to econ. out of ….good indeed. He has an important paper in the mathematics of stabilization (over) policies, scheduled to appear(?) in Econ. Journal shortly.”]

Getting back home, the names that occur to me have, I am sure, also occurred to you. Is Kenneth Arrow unavailable for a year’s arrangement? What about Vickrey? I don’t believe that in any absolute sense I would rate Vickrey above Christ, say, but for us he has the advantage of bringing a different background and approach.

The above is all written in the context of a definite one-year arrangement in the field of mathematical economics. I realize, of course, that this may turn out to be an undesirable limitation. This is certainly an opportunity to try someone whom we might be interested in permanently; and it may be possible to make temporary arrangements for math. econ. for the coming year – via DuBrul, Marschak, etc. The difficulty is that once I leave this limited field, the remainder is so broad that I hardly know where to turn. For myself, I believe we might well use this to bring someone in in money, if that possibility existed. If it did, I should want strongly to press on you Harry Johnson, here at Cambridge, but originally a Canadian educated at the University of Toronto, who is the one new person I have come to know here who has really impressed me.

One other person from the US left out of the above list but perhaps eligible even within the narrower limitations is William Baumol. Oughtn’t he be considered?

Within the narrower limitations, my own listing would, at the moment, be: Allais, Solow, Baumol, Arrow, Vickrey, Phillips. I would hasten to add that my listing of Arrow fourth is entirely consistent with my believing him the best of the lot in absolute competence, and the one who would still go to the top of this list for a permanent post.

I turn to the other possibility you raise in your letter, a permanent post a la the Tobin one. I am somewhat puzzled how to interpret the change of view, you suggest, I assume that the person would be expected to take over the directorship of Cowles. If this is so, it seems to me highly unfortunate to link it with a permanent post in the department. Obviously, the best of all worlds would be if there were someone we definitely wanted as a permanent member of the department who also happened to be interested in the Cowles area and was willing to direct, or better interested in directing, Cowles. In lieu of this happy accident, I would myself like to see the two issues kept as distinct as possible; to have the Cowles people name a director, with the aid and advice but not necessarily the consent, of the department; have the department offer him cooperation, opportunity to teach, etc., but without having him a full-fledged permanent member. I hope you will pardon these obiter dicta. I realize that this is a topic you have doubtless discussed ad nauseam; what is even more important, if after such discussion, you feel differently, I would predict that you would succeed in persuading me to your view; which is why I leave it with these dicta and without indicating the arguments – you can provide them better than I.

The issue strikes me particularly forcefully because I do feel that in terms of the needs of the department, our main need is not for someone else mainly in the Cowles area; it is for someone to replace either Mints in money, or me in orthodox theory, if I slide over to take Mints’ role.

For Cowles’ sake as well as our own, there might be much to be said for having the directorship be the primary post for whoever comes. It seems to me bad for Cowles to have that post viewed as either a sideshow or a stepping stone. For directorship of Cowles, some names that occur are: Herbert Simon; Dorothy Brady; with more doubt Modigliani. One possibility much farther off the beaten track is Warren Nutter, who has, I gathered, been a phenomenal administrative success in Wash. at Central Intelligence Agency; yet is an economist. Would Charlie Hitch, who has been running Rand’s economic division be completely out?

[Handwritten note: “You know, Gregg Lewis might be better than any of these if he would do it!]

If the post is to be viewed as primarily a professorship in the department, with Cowles directorship as a sideline, I have great difficulty in making any suggestions: I would not, in particular, be enthusiastic about any of those mentioned in the preceding paragraph. Arrow, yes, but he is apparently out. Simon Kuznets, yes, but he would be likely to make Cowles into something altogether different that it is. I feel literally stuck in trying to think of acceptable candidates. Perhaps I can be more useful in reacting to other suggestions.

Let me combine with this some comments on your March 15 letter, which I should have answered long since.

On the post-doctoral fellowship, I feel less bearish than you, primarily, I suppose because I am inclined to lay a good deal of emphasis on the intangible benefits from having a widespread group of people who have had a year at Chicago. It seems to me that a post-doctoral fellowship is more likely to do this than a staff appointment, both because it is likely to bring in a wider range of people to apply and because it is rather more likely to have a one or two year limit and so a more rapid turnover. What has disappointed me most is the limited number of people among whom we have been forced to choose. Why is it that we don’t get more applications? Is it because we do treat it now like a staff appointment? Do we advertise it as widely as we might and stimulate a considerable number of applicants? Or is it simply because the great increase in number of post-doctoral fellowships available (and decrease in quality of people going in for economics?) has lowered the demand for any one fellowship? I find it hard to believe that making it into a staff appointment would help much in providing more adequate review and appraisal – this is I believe a result of the limitations of time on all of us – but it might give it greater prestige and make it more valuable to the recipient in this way, though, it would cost him tax and limit freedom.

I believe that part of the problem you raise about the postdoctoral fellowship has little to do with it per se but is a general problem about the department. Is our own work subject to as much discussion and advice from our colleagues as each of us would like? The answer seems to me clearly no. The trouble is – and I am afraid it is to some extent unavoidable and common at other places – that we have so many other duties and tasks to perform that being an intellectual community engaged in cross-stimulation perforce takes a back seat. This disease is I think one that grows as the square of the professional age. From this point of view, I think that the more junior people around the better in many ways and I think this one of the real virtues of the development of research projects that will enable us to keep more beginners around.

On the whole, I continue to think that the fellowship idea is sound, in the sense that we ought to have a number of people around who have no assigned duties. I would defend the Mishan result in these terms. I think he was a most useful intellectual stimulant and irritant to have around even if his own output was not too striking. The virtue of the fellowship arrangement is that it enables you to shape the hole to the peg. I cannot of course judge about Prais. But I am surprised by your adverse comments on Dewey’s use of it; I would have thought his one of the clearly most successful post-doctoral fellowships so far.

As you have doubtless heard, Muth has decided to go to Cowles. I am sorry that he has. I think he is good. I am somewhat troubled about the general problem of recruiting for the Workshop at a distance. In addition to Muth, I had heard from Pesek, whom I encouraged but left the matter open because he would rather have a fellowship that he applied for that would pay his travelling expenses to Washington. My general feeling is that it would be a mistake to take anyone just because I am not on the spot, that it would be far better to start fairly slowly, and let the thing build up, adding people as they turn up next year. Any comments or suggestions would be greatly appreciated.

I am delighted to hear about Fred’s ford project. I had a wire from Willits recently re Harberger and I assume it was in connection with his proposed project. Al Rees will be a splendid editor, I feel, and it is excellent to have him entirely in the department. I hardly know what to think of Morton Grodzins as Dean. I assume that his appointment measn that he was regarded as a successful administrator at the Press. Grodzins has great drive and energy, is clearly bright and intelligent, but whether he has the judgment either of men or of directions of development that is required, and the ability to raise money that Tyler displayed, is something I have less confidence in. Who is taking over the Press?

I enjoyed your comments on both Arthur Burns and McCarthy. With respect to the first, I thought the economic report extraordinarily good, both in its analysis of the immediate situation and in its discussion of the general considerations that should guide policy. It showed courage, too, I think in its willingness to say nasty things about farm supports and minimum wages to mention two. My views about the recession are indicated by the title of a lecture I am scheduled to give in Stockholm towards the end of April: “Why the American Economy is Depression-proof”. After all, there is no reason why Colin Clark should be the only economist sticking his neck out. It continues to seem to me that the danger to be worried about is over-reacting to this recession and in the process producing a subsequent inflationary spurt. Arthur seems to me to be showing real courage in holding out against action. To do something would surely be the easy and in the short run politically popular course.

McCarthyism has of course been attracting enormous attention here. Indeed, for long it has crowded almost all other American news into the background with the result that it has given a thoroughly distorted view of America to newspaper readers. I enclose a clipping in this connection which you may find amusing. it is not a bad summary, though I trust I put in more qualifications.

We have gotten an opportunity to go to Spain via an invitation to lecture at Madrid (Earl’s doing, I suspect), so Rose and I are leaving next week for a week there. Shortly after our return we go to Sweden and Denmark for a couple of weeks. We are very much excited by the prospects. Best regards to all.

Yours

[signed]
Milton

 

Source: Hoover Institution Archives. Milton Friedman Papers. Box 194, Folder “194.6 Economics Department S-Z, 1946-1976”.

 

Image: Left, Milton Friedman (between 1946 and 1953 according to note on back of photo in the Hoover Archive in the Milton Friedman papers). Right, Theodore W. Schultz from University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Friedman from Cambridge on Arrow, Tobin, Harry Johnson, Joan Robinson. 1953

Thank goodness for leaves of absence and sabbaticals! In an earlier age letters were actually exchanged between the lone scholar off to foreign groves of academe or government service and colleagues back at the home institution. When Milton Friedman went off to the University of Cambridge for the academic year 1953-54 (see Chapter 17 “Our First Year Abroad”  in Milton and Rose D. Friedman, Two Lucky People: Memoirs), he wrote detailed letters discussing departmental matters and impressions of Cambridge academic life to the chair of the department, Theodore W. Schultz. In this posting we encounter Milton Friedman’s views on possible candidates to take up the directorship of the Cowles Commission, his very positive impression of Harry Johnson, his utter shock regarding Joan Robinson’s views on China, and comparisons between Chicago and Cambridge training in economics. More to come:  Here a letter dated 29 March 1954.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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15 Latham Road
Cambridge, England
October 28, 1953

Dear Ted [Theodore W. Schultz]:

Many thanks for your letter of October 22. It contained a fuller budget of news then I had otherwise received. I am delighted to hear of the decision of the Rockefeller Foundation, and appreciate your taking the necessary steps including repairing my omission in not specifying the effective date. I am sorry to hear that the problems raised by my absence were still further complicated by Allen [W. Allen Wallis?]. The Harberger-Johnson [Arnold Harberger; D. Gale Johnson] arrangement seems, however, excellent.

It is certainly too bad about Arrow. Re Tobin, as you know, I have in the past had a very high opinion of his ability and promise though I would not have put him as high as Arrow. I regret to say, however, that my opinion fell somewhat this summer as a result of going over in great detail his article on the consumption function in the collection of essays in honor of [John Henry] Williams. As you may know, I drafted this summer a lengthy paper on the theory of the consumption function. One of the pieces of evidence I considered was Tobin’s paper, which reached conclusions in variance with most of the other evidence. On close examination, his conclusions turned out not to be justified by his own evidence, but rather to be a product of sloppy and incompetent statistical analysis. One swallow does not of course make a summer, but I am inclined to give this piece of evidence more weight than I otherwise would since it is the only bit of his work that I have gone over with sufficient care to feel great confidence in my judgment of it. My generally favorable opinion has been based on a rather superficial and casual reading of most of his other published work – indeed, on first reading, I had had an equally favorable opinion of the consumption paper. His memorandum on research that you sent me strikes me as being on the whole very sensible and very good.

In view of the above, I am very uncertain how to respond to your request for my “vote”. Everything obviously depends on the alternatives, and these are likely to vary if viewed in terms of the Cowles position in the department. Are either the former, Tobin may well be the best of the available people. Re: the latter, I much more dubious that he is than formerly. In view of my inability to participate in the discussion of the alternatives, the best thing seems to me to be to abstain from casting a definite vote either way, to make it clear that I shall cheerfully accept the decision of my colleagues, but to urge them strongly to canvass possible alternatives carefully and if possible to avoid letting an appointment to Cowles also commit the department to a permanent appointment in the department, unless the letter seems desirable on its own account.

May I complicate your problem further by introducing another name that the department ought to keep in mind in considering its long-run plans, namely Harry Johnson, now here at Cambridge, but originally a Canadian. Of the various younger people I have met around here, he impresses me as being by all odds the best and most promising, and as of the moment I would unhesitatingly rate him above Tobin. As you know, his specialty has been money and he lectures here on money and banking, but he has also been doing some work in international trade. More than most of the people here he has worked in technical and scientific economics instead of allowing himself to be diverted almost entirely to policy issues – which I suppose appeals to me partly because his policy position is so different from my own but impresses me partly also because I have been rather shocked by how large a part of intellectual activity around here is concerned almost exclusively with current policy issues. I have no idea whether Johnson would be interested in moving – he is certainly regarded as one of the clearly important and promising people at Cambridge and seems to have an assured future here – but the chance seems to me sufficiently great that we ought to keep him on our list.

Incidentally, back to Tobin, Dorothy Brady was having my piece on consumption typed up and was to send a copy to Margaret Reid when done, so that the detailed criticism of Tobin’s article that it contains could be made available to anyone who wanted to look at it.

Writing this paragraph just gave me a brainstorm – why not Dorothy for the Cowles post? In her case it would be easier to separate the appointment from a departmental commitment since she would almost certainly not demand tenure; she is a first-rate and experienced administrator; she has the necessary mathematical and statistical background; and she might give the research program a highly desirable shift toward closer contact with significant detailed empirical and economic problems – which is probably at the same time her strongest recommendation and the greatest obstacle to agreement.

On the other issue you raise, I am very much in favor – from our point of view – of Al Rees for the editorship. I think he would be an excellent editor. I am delighted that you were able to persuade Earl [Hamilton] to stay on for another year – I wish he felt able to keep it longer, as I am sure we all do, but Al seems to me clearly the next best alternative.

We have been enjoying Cambridge very much indeed, though I must confess that to date it has been too stimulating and active for me to have gotten much work done. I am enormously impressed – and in some directions, depressed – by the difference in atmosphere from the US. Educationally, the aim of education is to train the future ruling class rather than simply to educate people, which accounts for much more explicit emphasis in teaching and research on problems of immediate economic policy – economics is essentially taught as an art to be employed by rulers rather than as a science. There is enormous emphasis on form and cleverness, which reaches its peak in debates, of which I have participated in one (opposing the resolution “Yankee-eating baiting is unjustifiable and ungrateful” – tell me, how should I interpret the fact that on the vote of the audience, my side won?) And listening to another in the Cambridge Union. Surprisingly, the appeal is to the emotions rather than the reason; the level of wit and of phrasing is amazingly high, of intellectual content, abysmal. Politically, the atmosphere is incredibly redder than at home. This, I think, accounts for a good deal of the misunderstanding here of the state of civil liberties in the US. The right comparison to make is between tolerance of opinions equally deviant from the norm; the comparison that is made is between tolerance of the same opinion; but the normal opinion here would be regarded as clearly “left” at home, and moderately left opinion here is extremely radical; this difference in average opinion leads to the belief here that there is complete intolerance in the United States. These reflections are partly stimulated by a talk Joan Robinson gave on China a little over a week ago. It was an incredible talk to me; I was glad I went because I wouldn’t have believed anybody who had given me an accurate report, and you will have the same difficulty in believing mine. What is incredible is not alone that she sincerely believed the most extreme statements of the Chinese Communists about tremendous progress as a result of the “liberation”, but that she presented them without any examination of the internal consistency of her successive statements, without a sign of critical intelligence at work, without attempting to cite evidence of a kind she could have expected to acquire as a result of her brief visit there. Had the same talk been given by a faculty member in the US there undoubtedly would have been a fuss while here it passed over without a ripple. This difference may in part reflect a difference in tolerance of extreme opinions; but to a much greater extent it reflects the fact that her opinion is nothing like so extreme relative to British opinion as relative to American. The fair comparison is between the reception of her speech and one that, let us say, Maynard Krueger would make; and I doubt that there would be much difference in the reactions in that case.

The anti-American feeling is really extreme. It is widely accepted that America has concluded that war is inevitable, is no longer even interested in maintaining the peace and only waiting for an appropriate time to start a war. The American troops in England and Europe are said to be unwanted – though I’m sure an outcry would go up if they were to be withdrawn. England’s trade difficulties are America’s fault, because American productivity is growing so shockingly fast – this is a theme that in politer form is being increasingly put forth in academic circles, note especially Hicks in his inaugural address. All in all, these views, surprisingly enough, lead the left and not so left here to espouse essentially the Hoover-Taft position about the role America should play.

These are all of course first impressions for a highly biased segment of England, so I know you will take them with the mass of salt they deserve.

We’re all personally fine. The kids are quite happy in their schools. We are happy to be coming to the end of our month in a hotel – we move into the house we rented this Friday.

Our very best to everyone.

 

Yours,

[signed]

Milton

Source: Hoover Institution Archives. Milton Friedman Papers. Box 194, Folder “194.6 Economics Department S-Z, 1946-1976”.

Image: Left, Milton Friedman (between 1946 and 1953 according to note on back of photo in the Hoover Archive in the Milton Friedman papers). Right, Theodore W. Schultz from University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists Funny Business

Chicago. HMS Pinafore parody about Milton Friedman

What is a faculty-student party without skits and songs in which popular texts are given a good burlesque once over? An even duller affair to be sure.

I am the first to admit that Economics in the Rear-View Mirror is a pretty dry boutique blog. Even my occasional attempts to liven things up are bound to fall flat for those who have not endured the rigors of graduate education in the dismal science. But in the genuine interest of preserving artifacts of graduate education in economics past, I have already included Professor William Parker’s hit parody of the hymn “Rock of Ages”, originally performed at a Yale skit party and later in 1976 at the Adam Smith Roast organized by M.I.T. graduate students of economics. This posting now adds a text (authorship unknown…any claimants out there?) from the University of Chicago. 

“A good parody is a fine amusement, capable of amusing and instructing the most sensible and polished minds; the burlesque is a miserable buffoonery which can only please the populace.” (translation from “Parodie” in Encyclopédie ou Dictionnaire raisonné des sciences, des arts et des métiers, 12:73–74 (Paris, 1765)). 

Readers may judge for themselves where this artifact falls in the spectrum running from “good parody” to “miserable buffoonery”.

Milton Friedman kept one folder in his files dedicated to humor from University of Chicago skits and student publications. The following burlesque aimed at Milton Friedman himself was considered good enough in Chicago that it was recycled at least once. Both versions in the Friedman folder are undated and I welcome blog visitors to express their opinions as to which version might have preceded the other (with explanation).

For those who don’t know the original, here is a video clip of “When I was a Lad” from the operetta H.M.S. Pinafore by Gilbert and Sullivan.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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Version 1:

MEMBER OF THE FACULTY
(to the tune of “When I was a lad” from PINAFORE)

 

When I was a lad I served a term
Under the tutelage of A. F. Burns.
I read my Marshall completely through
From beginning to the end and then backward, too.
I read my Marshall so carefully that now I am professor at the U. of C.
(He read his Marshall so carefully that now he is professor at the U. of C.)

I learned the philosophy of “as if”
And now everything appears relatif.
Of exegesis I obtained such a grip
That soon I was granted a fellowship.
Oh, such a good fellow you never did see, so now I am professor at the U. of C.
(Oh, such a good fellow you never did see, so now I am professor at the U. of C.)

Since products all do clearly compete
From automobiles to babies sweet,
The very existence of monopoly
I explained away as sophistry.
This sophistry is so good for me, that now I am professor at the U. of C.
(This sophistry is so good for he, that now he is professor at the U. of C.)

Of Keynesians I can make mincemeat;
Their battered arguments now line the street.
I get them in their weakest assumption,
“What do you mean by consumption function?”
They never gave an answer that satisfied me, so now I am professor at the U. of C.
(They never gave an answer that satisfied he, so now he is professor at the U. of C.)

Of laissez-faire I am the champ,
Outstanding member of the liberal camp.
With social zeal I never have burned;
With feasibility I’m not concerned.
This ivory tower so suited me, that now I am professor at the U. of C.
(This ivory tower so suited he, that now he is professor at the U. of C.)

Now students all, whoever you may be,
If you want to climb the academic tree,
Stick close to your texts and never disagree
And you all may be professors at the U. of C.
(Stick close to your texts and never disagree
And you all may be professors at the U. of C.)

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Version 2:

MEMBER OF THE FACULTY:
(to the tune of “When I was a Lad” from H.M.S. Pinafore)

When I was a lad I served a term
Under the tutelage of A. F. Burns
I studied my Marshall completely thru
From beginning to the end and then backwards too
>
I studied my Marshall so carefully that now I am professor at the U. of C.

Chorus: (He studied his Marshall so carefully that now he is professor at the U. of C.)

[4 beats]

I learned the philosophy of “AS IF”
And now everything appears relatif
Of exegesis I obtained such a grip
That soon I was granted a fellowship
>
Oh, such a good fellow you never did see, so now I am prof. at the U. of C.

Chorus: (Oh, such ….)

Since every product does compete
From an automobile to a baby sweet
The very existence of monopoly
I explain away as sophistry
>
This sophistry is so good for me that now I am teaching at the U. of C.

Chorus: (This sophistry ….)

Of Keynesians I can make mincemeat
Their battered arguments now litter the street
I hit them in their weakest assumption
“What do you mean by consumption function?”
>
They never gave an answer that satisfied me, so now I am prof. at the U. of C.

Chorus: (They never….)

Of laissez-faire I am the champ
The outstanding member of the liberal camp
With social zeal I never have burned
With feasibility I am not concerned
X>
This ivory tower so suited me that now I am professor at the U. of C.

Chorus: (This ivory ….

Now students all whoever you may be
If you want to climb the academic tree
Stick close to your texts and never disagree
And you all may be professors at the U. of C.

Chorus: (And you …)

 

Source: Hoover Institution Archives, Milton Friedman Papers, Box 79, Folder 6 “University of Chicago, Miscellaneous”.

Image Source: HMS Pinafore performance by the Bryn Mawr Glee Club (April 1915).

 

 

Categories
Chicago Economists

Chicago. James Buchanan’s Dissertation Outline, 1947

James McGill Buchanan, Jr.’s Ph.D. in economics at the University of Chicago was awarded in the summer quarter of 1948. The title of his dissertation was “Fiscal Equity in a Federal State”. From the Milton Friedman papers at the Hoover Institution we have the following transcription of the mimeographed dissertation outline submitted by Buchanan that was discussed in the economics department faculty meeting of October 24, 1947. The agenda of that faculty meeting along with Milton Friedman’s handwritten additions (in square brackets) are included at the end of this posting. The procedure for admission to Ph.D, candidacy is described in a 1949 memo written by Milton Friedman to members of the Department’s Ph.D. Thesis Committee.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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2. Present Procedure
[1949, University of Chicago, Economics]

a. Admission to candidacy. As I understand it, we have no very formalized procedure or requirements. Students typically discuss possible thesis topics with one or more faculty members, construct outlines of the projected thesis, ordinarily get the reaction of one or more faculty members to it, revise it accordingly, and then formally submit the thesis topic and outline to the Department for approval and admission to candidacy. The submitted outline is occasionally extremely detailed, occasionally very general, and is sometimes accompanied by a general statement of objective and purpose, sources of material for the thesis, etc.

[…]

Source: Undated memo (early 1949) written by Milton Friedman to members of the Committee on Ph.D. Thesis Outlines and Requirements from Hoover Institution Archives. Milton Friedman Papers, Box 79, Folder 5 “University of Chicago Minutes, Ph.D. Thesis Committee”.

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Dissertation Outline, James M. Buchanan, October 1947

J. M. Buchanan

EQUITY CONSIDERATIONS IN INTERGOVERNMENTAL FISCAL ADJUSTMENT

I. The Problem —

A. The federal political structure

1. Federalism in political theory. Varying degrees of dual sovereignty. The question of the finality of a federal structure. Is it a final point in political organization or merely a stage in an evolutionary process?

2. The historical development of federalism in the United States. Trends toward centralization and opposing tendencies. The expanding role of government on the whole. The expanding sphere of activity of the central as opposed to subordinate units. Projection of future trends.

3. The case for federalism as a permanent political structure in the United States. Its value as a means of a division of power, as a protection against a tyranny of the majority, etc.

4. Statement of viewpoint on federalism taken in this study.

B. The national economy —

1. The historical development of the expanding scope of the economy. The extension of the market, the trend toward economic centralization, in the sense that the nation has become the unit which defines the area of the allocation of resources.

2. The extent to which the economy is national — increasing specialization, increased resource mobility, etc.

C. Conflicts which arise in the financing of government due to the superimposition of a federated political structure on a national economy.

1. The heterogeneity of the subordinate units of government. Resource heterogeneity. Cultural, social differences. Income disparities leading to differentials in tax burdens and service standards. The basic fiscal inequity inherent in such a structure.

II.            A Theoretical Solution –

A. What is fiscal equity in such a structure?

1. Definition and limitation. For present purposes concept narrowed to that of “equal treatment for equals and unequal treatment for unequals”. Abstraction from any attempt to determine equity as between unequals since such a concept not needed for problems considered.

B. Application of the concept —

1. Necessity of benefit calculation for any determination of equity among individuals in separate subordinate governmental units. Difficulties in benefit calculation, aside from special cases. Assumption of per capita general expenditure as best measure of benefit.

2. Definition of the “fiscal residuum” or “net tax” – Net value of services available less net value of taxes paid. Considerations of “government” as the total of all layers in structure, federal, state, and local.

C. Arithmetical Examples –

Examples illustrating possible application of the equity criteria in hypothetical cases. Illustration that “equal treatment for equals and unequal treatment for unequals” will impose geographical financial neutrality upon the individual.

III.           A study of Comparative Fiscal Treatment of Similarly Situated Individuals in High Income and Low Income States –

A. Selection of states considered – one with high per capita income, one with low. (Tentatively have selected New York and Mississippi.)

B. Assumptions and abstractions –

1. Assumption of the State-Local fiscal problem as solved or non-existent. Application of criterion to 2-level structure only. State-local considered as one unit. Seek only interstate differentials, not intrastate here.

2. Assumption of money income as measure of economic position. Abstraction from non-pecuniary advantages of geographical location. Individuals considered in similar economic circumstances if money income, pproperty value, same. Physical property same. Family obligations same.

C. Selection of hypothetical individuals to be compared. Determination of income ranges to be covered.

D.            Expenditure pattern of individuals considered.

1. Proportion of income saved, spent at various income levels.

2. Distribution of expenditure at various income levels.

3. Property holdings at different income levels.

E. Determination of tax burdens of individuals considered.

1. Examination of tax structures of states in question.

2. Assumptions as to final incidence of state taxes. More than one set of assumptions can be made and results collocated.

3. Tax burden of hypothetical individuals in each income group in each state can be determined by application of assumptions as to incidence to expenditure patterns.

4. Indication that validity of the study does not depend upon validity of the assumptions as to incidence since no attempt is made to compare dissimilarly situated individuals. (Such a comparison will necessarily show in the computation, however, and for this reason the assumptions should be as realistic as possible.)

F. Determination of value of benefits of government service provided —

1. Necessity to use per capita general expenditure as best benefit measure.

2. Use of value input only not value output. Value output will differ as administrative efficiency of state varies.

G. Calculation of fiscal residua of similarly situated individuals considered —

1. Possibility of abstracting from federal taxes and expenditures since similarly situated individuals supposedly treated similarly by federal government.

H.            Calculation of the interstate differential in fiscal residua of the hypothetical similarly situated individuals considered.

IV.           Existing and proposed attempts at solution.

A. Vertical Integration

1. Examination of the various proposals made to integrate and unify the whole financial structure; plans for realignment of functions, central collection, local administration, complete centralization, etc.

B. Horizontal Integration and Coordination –

1. Readjustment of geographical boundaries, consolidation of non-efficient units. The “regionalism” approach.

C. The grant-in-aid as the adjusting device.

1. The existing structure of grants-in-aid in the United States – a short summary of the more prominent characteristics of the system.

2. Proposals for extension of the system –

a.            Further use of the conditional grant

(1)  Merits of the conditional grant

(2)  Drawbacks

(a)  Effects on budgetary independence of subordinate units.

(b) Central direction and interference.

b.            The concept of a “minimum standard”

(1)  Idea of the “national interest”

(2)  Attempts at defining “minimum standards”

(3)  Violation of equity criteria

(4)  Federal assumption of a function.

D.            Realistic Appraisal of Various Proposals from Standpoint of Political and Administrative Feasibility.

V.            Policy Implications of the Criterion of Equity Proposed in this study.

A. The practicability of direct application.

1. Difficulty of measurement

2. Political and administrative barriers.

B. Effect of the Acceptance of the Theoretical Validity of the Criterion upon Practical Policy.

1. Early elimination of matching requirements in grant-in-aid distribution.

2. Early abandonment of the concept of “minimum standards”.

3. Broadening of purpose for which grants are made.

4. Further extension of so-called “equalization” grants.

5. Elimination of the idea of “charity” in intergovernmental fiscal adjustment.

6. Greater federal reliance on the income tax as a source of revenue.

C. The proposals of the Canadian Royal Commission and Possible Application of Similar Proposals to the United States.

VI.           Possible Objections to the Equity Criterion Proposed and its Policy Implications.

A. Theoretical Objections

1. The central government as the adjusting unit.

2. The inclusion of fiscal treatment by government in the criteria for the optimum allocation of resources.

3. The nation as the economic unit.

B. Administrative Objections.

1. Violation of principle of fiscal responsibility.

VII.          Conclusion.

____________________________

 

Department of Economics
AGENDA
Friday, October 24, 1947, at 3:30 p.m. in SS424

I. Students’ Business

A. Admission to Candidacy for the Ph.D. Degree

James M. Buchanan

Subject: Equity Considerations in Intergovernmental Fiscal Adjustment.
Field: Government Finance
Committee: [Blough, chairman, Perloff, Knight]

Henry Woldon Hewetson

Subject: An Examination of the Distance Principle of Railway Freight rate making with references to Canadian Conditions.
Field: [Transportation]
Committee: [Sorrell, Koopmans, Friedman]

[Inserted:

Harriett D. Hudson.

Progressive Mine Workers of America
Committee: Douglas, ch; Nef; (illegible name) Lewis]

Norman Maurice Kaplan

Subject: Models for Socialist Economic Planning
Field:
Committee: [Marschak, ch.; ch. Harris; A. P. Lerner; Friedman

Raymond H. McEvoy

Subject: Effects of Federal Reserve Policies, 1929-36
Field: Money, Banking, and Monetary Policy
Committee: [Mints, Hamilton, Metzler]

Wallace E. Ogg

Subject: A Study of Maladjustment of Resources in Southern Iowa
Field: Agricultural Economics
Committee: [Johnson, Hardin (pol sci), Lewis]

B. Admission to candidacy for the Alternative Master’s Degree (without thesis.)

Raymond H. McEvoy

C. Admission to candidacy for the Regular Master’s Degree

Peter Senn

Subject: Federal subsidization of the Banks
Field:
Committee:

D. Petitions

Guy Black—for permission to substitute work in Mathematics for the regular requirement of a second foreign language.

Keith O. Campbell—for approval to take Political Science as one of the fields for the Ph.D. Degree.

Gershon Cooper—to substitute the following courses in math. for the German language requirement for the Ph.D. Degree: Mathematics 216, 220, and 228.

Bernard Gordon—to substitute a mathematical sequence of Calculus I and Calculus II in place of one of the language requirements for the Ph.D. Degree.

Dale A. Knight—to use Political science as one field for the Ph.D. Degree.

Chih-wei Lee—to take English as the second language.

[John K. Lewis]

II. Encyclopedia Britannica Economic Articles

III. Language requirements for Foreign students.

IV. Report of Master’s Degree Committee, Spring and Summer, 1947

V. New Business

 

Source: Hoover Institution Archives. Milton Friedman Papers. Box 79, Folder “79.1 University of Chicago Minutes Economics Department 1946-1949”.

Image Source: The Concise Encyclopedia of Economics. Biography of James M. Buchanan.

 

Categories
Chicago Courses Suggested Reading Syllabus

Chicago. Monetary Dynamics Seminar. Milton Friedman, 1952

Welcome to Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled thus far. You can subscribe to this blog below.  There is also an opportunity for comment following each posting….

______________________

Transcribed from items in the Milton Friedman papers at the Hoover Institution today’s posting includes the bibliographic handout provided by Milton Friedman to the participants in his graduate seminar “Monetary Dynamics” that took place in the Spring Quarter of 1952 along with the official class list. We note that one of the graduate students enrolled in the seminar was Gary S. Becker. It is also interesting to note that “empirical studies” essentially meant “case studies” as of mid-twentieth century.

___________________________

The University of Chicago
Office of the Registrar

OFFICIAL CLASS LIST
SPRING QR. 1952

Instructor: FRIEDMAN MILTON
Department: ECON
Course number: 432

Student name:

Axilrod, Stephen H.
Becker, Gary S.
Deaver, John V.
Drayton, James
Fisher, Lawrence
Klein, John
Oort, Coenraad J.
Timberlake, Richard H. Jr.
Venetianer, Edmond

___________________________

 

Economics 432: Monetary Dynamics
Spring Quarter, 1952

  1. The central topic for this quarter will be monetary inflation. We hope to cover the theory of monetary inflation and empirical evidence on monetary inflations. The major issues in this area are, the process whereby changes in the stock of money produce their effect on prices and output or conversely, whereby changes in prices and output affect the stock of money; the role of the interest rate in inflation or, conversely, the effect of monetary changes on the interest rate; the role of exchange rates in monetary inflation as both cause and effect; the relative value of alternative simplified theories for predicting the course of inflationary movement; the role and problems of governmental monetary policy in inflationary periods; empirical regularities in monetary inflations and hyperinflations.
  2. We shall of course not be able to cover all these issues at all adequately; the interests of the members of the seminar will guide the selection made.
  3. There is a vast literature on these problems. The following bibliography, despite its length, is highly selective and is designed to suggest material available and to give leads to people working on particular topics rather than to be exhaustive. The three parts into which the essentially theoretical material is classified (1 to 3) are by no means mutually exclusive and many entries could with equal justification have been classified elsewhere; the sections are meant only to indicate major broad divisions and the order within the sections, the rough lines of theoretical development. Similarly, many of the items in Section 4, supposedly dealing with policy, could readily have been classified in the earlier sections; and many of the entries in section 5, labeled empirical studies, contain discussions of policy or of theory.

 

1. Classical analysis of inflation

A. Original sources

David Hume, “Of Money,” “Of Interest” in Essays, Moral, Political and Literary, part II (first published 1752).

Adam Smith, Wealth of Nations (1776), Vol I. Bk. II, Chap 4; Bk 1, Ch xi, part of Pt. III (pp. 188-210 in Cannan edition); Bk. II, Ch. 11, esp. pp. 283-87 of Cannan edition.

Henry Thornton, An Essay on Paper Credit (1802), esp pp. 254-8, 281, 296-7, and 335-9 of reprint.

David Ricardo, Principles of Political Economy, (3rd ed. London (1821), Ch. 21; The Works and Correspondence, edited by P. Sraffa, Volume III, passim. (Cambridge 1951).

Nassau Senior, On the Value of Money (1840)

________________, Three Lectures on the Cost of Obtaining Money (1930)

John Stuart Mill, Principles of Political Economy, (1848), Bk. III, Ch. 8, 9, 23.

J. E. Cairnes, “Essays Toward a Solution of the Gold Question,” (written, 1858 to 1860) in Essays in Political Economy, Theoretical and Applied, (London, 1873) pp. 1 to 165.

B. Secondary sources

T. E. Gregory, Introduction to Tooke and Newmarch (London (1928), esp. pp. 22-31.

F. A. Hayek, “A Note on the Development of the Doctrine of ‘Forced Savings’”, Quarterly Journal of Economics, 1932, pp. 123-33.

J. W. Angell, The Theory of International Prices – history, criticism, and restatement (Cambridge, Mass., 1926)

Jacob Viner, Studies in the Theory of International Trade, (New York, 1937), Ch. III, IV, V.

Lloyd W. Mints, History of Banking Theory (Chicago, 1945)

2. Neo-classical

A. Swedish school

Knut Wicksell, Interest and Prices, esp introduction, by Bertil Ohlin, Preface, (London 1936) and Ch. 5-9.

_______________, Lectures, Vol. 2, Ch. IV; pp. 127-222 (London 1935)

Gunner Myrdal, Monetary Equilibrium, London (1939).

E. Lundberg, Studies in the Theory of Economic Expansion, (Stockholm, 1937)

E. Lindahl, Studies in the Theory of Money and Credit (London, 1939)

A. P. Lerner, “Swedish Stepping Stones in Economic Theory,” Canadian Journal of Economics, November 1940.

Brinley Thomas, Monetary Policy and Crisis, Ch. 3 and 4. (1936)

J. Marschak, “Wicksell’s Two Interest Rates,” Social Research, Nov. 1941.

B. Austrian school

L. von Mises, The Theory of Money and Credit (1934) Eng. Translation.

F. A. Hayek, Prices and Production (2nd edition (1935)).

C. Cambridge school

Alfred Marshall, Principles of Economics, pp. 593-5; Money, Credit, and Commerce, pp. 38-50 (1923)

__________________, Official Papers, Ch. II, esp. 38-41, 45-6, 123-32, 157-60. (1926)

D. H. Robertson, Essays in Monetary Theory, esp. Ch. II, XII (1940)

__________________, Banking Policy and the Price Level (3rd ed, 1950)

__________________, “Notes on the Theory of Money,” Readings in Monetary Theory, (Blakiston, 1951), pp. 159-61.

A. C. Pigou, Industrial Fluctuations (1927)

J. M. Keynes, Monetary Reform (London, 1923) especially Ch. III.

F. Langston, The Trade Cycle.

D. Other

J. M. Keynes, A Treatise on Money, esp Vol I, Ch. 13, pp. 293-302, Vol. II, Ch. 25, 30, 32, 33 (1930).

R. G. Hawtrey, The Art of Central Banking (1933), esp. pp. 116-207, 366-71.

__________________, Capital Employment, (1937) Ch. 4-6.

Irving Fisher, Elementary Principles of Economics, Ch. IX (N.Y. 1912) (revised)

__________________, The Purchasing Power of Money, (1926) Ch. 8.

__________________, The Rate of Interest, Ch. 8, 14, 16.

Bertrand Nogaro, Modern Monetary Systems (London, 1927)

M. Albert Aftalion, Monnaie, Prix et Change (Paris, 1927)

Joseph Schumpeter, Business Cycles, Vol II, Ch. 8 (1939)

MacMillan Report, Royal Commission on Finance and Industry, Cmd 3897 (1931), Ch. 11, pp. 92-160.

E. Critiques

H. Ellis, German Monetary Theory (1934) Ch. 8, 9, 19.

R. J. Saulnier, Contemporary Monetary Theory (1938)

Arthur Marget, The Theory of Prices (1938, 1942) Vol 1, Ch. 2, 12-16, Vol 2, Ch. 3.

R. S. Sayers, Modern Banking, Ch. VI (1939, rev. ed.)

G. Haberler, Prosperity and Depression, (1941, 3rd ed.) Part I.

3. Keynes of General Theory

A. General

J. M. Keynes, The General Theory of Employment, Interest, and Money. (London, 1936)

R. F. Kahn, “The Relation of Home Investment to the Multiplier,” Economic Journal, 1931.

Joan Robinson, Essays in the Theory of Employment (1938)

________________, “The Economics of Hyper-Inflation,” (Economic Journal, Sept. 1938), “War Time Inflation,” both in Collected Economic Papers (New York, 1951).

M. Kalecki, Essays on the Theory of Economic Fluctuations (1939)

J. R. Hicks, Value and Capital (2nd ed. 1946) Parts 3 and 4.

Alvin H. Hansen, Fiscal Policy and Full Employment, (1941).

________________, Monetary Theory and Fiscal Policy (1949) Chapter. 7, 8, 9.

________________, Economic Policy and Full Employment (1947).

L. Klein, The Keynesian Revolution (1947)

T. Wilson, Fluctuations in Income and Employment (3rd ed. 1948)

W. Fellner, A Treatise on War Inflation (1942)

A. G. Hart, Money, Debt and Economic Activity, (1948) Ch. 10.

A. P. Lerner, The Economics of Control, Ch. 21-25 (1944)

Walter A. Salant, “The Inflationary Gap, Meaning and Significance for Policy Making,” American Economic Review (June, 1942) pp. 308-14.

Milton Friedman, “Discussion of the Inflationary Gap,” American Economic Review (June, 1942) pp. 314-20.

Arthur Smithies, “The Behavior of Money National Income under Inflationary Conditions,” Quarterly Journal of Economics, 1942.

T. C. Koopmans, “The Dynamics of Inflation,” Review of Economics and Statistics, 1942, pp. 53-65 (comment by A. Smithies and reply, pp. 189-90.)

Franklin Holzman, “Income Determination in Open Inflation,” Review of Economics and Statistics, 1950.

Clark Warburton, “Monetary Expansion and the Inflationary Gap,” American Economic Review, 1944.

Lloyd A. Metzler, “Wealth, Saving, and the Rate of Interest,” Journal of Political Economy, April, 1951.

B. Wage-Price Spiral

Ralph Turvey, “Period Analysis and Inflation,” Economica, 1949.

________________, “Some Aspects of the Theory of Inflation in a Closed Economy,” Economic Journal, Sept. 1951.

J. Dusenberry, “The Mechanics of Inflation,” Review of Economics and Statistics, 1950.

W. A. Morton, “Trade Unionism, Full Employment, and Inflation” American Economic Review, March 1950.

_______________, “Keynesianism and Inflation,” Journal of Political Economy, June 1951.

M. W. Reder, “Theoretical Problems of a National Wage Policy,” Canadian Journal of Economics (Feb. 1948)

_____________, “On Money Wages,” Industrial Relations Research Association conference, 1950.

A. Rees, “Postwar Wage Determination in the Basic Steel Industry,” American Economic Review (June 1951).

4. Government Policy in Inflationary Periods

David Ricardo, “Funding System,” in The Works and Correspondence of David Ricardo, ed by Piero Sraffa (Cambridge, 1951), Vol. IV, esp pp. 185-200; also Vol. III, passim.

A. C. Pigou, The Political Economy of War (revised ed., 1940)

A. G. Hart, E. D. Allen, and collaborators, Paying for Defense (Philadelphia, 1941)

M. Kalecki, “General Rationing,” Bulletin of Oxford Institute of Statistics, January 1941.

G. L. Bach, “Rearmament, Recovery, and Monetary Policy,” American Economic Review, 1941

W. A. Wallis, “How to Ration Consumer Goods and Control Their Prices,” American Economic Review, 1942.

Carl Shoup, Milton Friedman, and Ruth Mack, Taxing to Prevent Inflation (New York, 1943).

Milton Friedman, “The Spendings Tax as a Wartime Fiscal Measure,” American Economic Review, 1943.

J. J. Polak, “On the Theory of Price Control,” Review of Economics and Statistics, 1945.

L. Seltzer, “Is a Rise in Interest Rates Desirable or Inevitable,” American Economic Review, December, 1945.

R. I. Robinson, “Monetary Aspects of Public Debt Policy,” Postwar Economic Studies #3, Board of Governors of Federal Reserve System.

H. C. Wallich, “The Changing Significance of the Interest Rate,” American Economic Review, December 1946.

R. G. Hawtrey, “Monetary Aspects of the Economic Situation,” American Economic Review, March 1948.

Ten Economists on Inflation, Review of Economics and Statistics, 1948.

L. V. Chandler, “Federal Reserve Policy and Federal Debt,” American Economic Review, March 1949.

R. S. Sayers, “Central Banking in Light of Recent Experience,” Quarterly Journal of Economics, 1949.

H. C. Murphy, The National Debt in War and Transition (1950)?E. A. Goldenweiser, American Monetary Policy (1951)

L. W. Mints, Monetary Policy for a Competitive Society. (1950)

Subcommittee on Monetary, Credit and Fiscal Policies (“Douglas subcommittee”), Hearings, 81st Congress, 1st Session and Report, 81st Congress, 2nd Session, Senate Document 129.

“The Controversy over Monetary Policy,” (Seymour Harris, Lester Chandler, Milton Friedman, Alvin Hansen, Abba Lerner, and James Tobin), Review of Economics and Statistics, August 1951.

J. K. Galbraith, The Theory of Price Control (1952)

Joint Committee on the Economic Report, Monetary Policy and the Management of the Public Debt, Joint Committee Print, 82nd Congress, 2nd Session (Washington, 1952) in two volumes.

5. Empirical Studies

W. C. Mitchell, History of the Greenbacks (Chicago, 1903)

_______________, Gold, Prices, and Wages under the Greenback Standard (Berkeley, 1908)

N. S. Silberling, “Financial and Monetary Policy of Great Britain during the Napoleonic Wars,” Quarterly Journal of Economics (1924), pp. 214-33, 397-439.

C. Bresciani-Turroni, The Economics of Inflation.

E. L. Dulles, The French Franc (New York, 1929)

W. De Bordes, The Austrian Crown (London, 1924)

S. S. Katzenellenbaum Russian Currency and Banking, 1914-24 (London, 1925)

James H. Rogers, The Process of Inflation in France, 1914-27 (New York, 1929)

Frank D. Graham, Exchange, Prices, and Production in Hyper-inflation: Germany, 1920-23 (Princeton, 1930)

Seymour Harris, The Assignats (1930)

R. A. Lester, Monetary Experiments (1939)

E. J. Hamilton, “Prices and Wages at Paris under John Law’s System,” Quarterly Journal of Economics (November, 1936).

______________, “Prices and Wages in Southern France under John Law’s System,” Economic History, a supplement of the Economic Journal (February, 1937)

Bertrand Nogaro, “Hungary’s Monetary Crisis,” American Economic Review (Sept. 1948).

Henry W. Spiegel, “A Century of Prices in Brazil,” Review of Economics and Statistics, 1948

A. J. Brown, “Inflation and the Flight from Cash,” Yorkshire Bulletin of Economic and Social Research, Vol. 1 (Sept., 1949)

L. V. Chandler, Inflation in the United States, 1940-49. (1951)

Milton Friedman, “Price, Income, and Monetary Changes during Three Wartime Periods,” [American Economic Review, Papers and Proceedings, May 1952, pp. 612-625]

 

Source: Hoover Institution Archives. Milton Friedman Papers, Box 78, Folder 4 (University of Chicago, Econ 432).

 

Categories
Chicago Suggested Reading Syllabus

Chicago. Theory and Measurement of Demand. Henry Schultz, 1934

The undated reading list and bibliography for Henry Schultz’s advanced course “Theory and Measurement of Demand” transcribed below, included in Milton Friedman’s papers at the Hoover Institution Archives, are almost certainly from the Autumn quarter, 1934. This was the academic year that Friedman worked as Henry Schultz’s research assistant at the University of Chicago and audited the course.

______________________________

Friedman audited the Schultz course, Theory and Measurement of Demand

According to the draft of his Civil Service application Milton Friedman worked as personal assistant to Henry Schultz October 1934-August 1935 at a yearly salary of $1600. In his list of courses on a separate page, Friedman writes that he “visited”, i.e. did not take for credit, a course in the Theory of Demand given by Henry Schultz during the academic year 1934-35.

 

Source: Milton Friedman Papers, Hoover Institution Archives, Box 5, Folder 4 (Employment records, Civil Service Commission).

______________________________

Friedman describes his work for Schultz

From a carbon-copy, presumably an attachment to the same Civil Service application in Box 5, Folder 4, Friedman writes:

“I lived in Chicago, Ill. from September, 1934 to August, 1935 while employed by the University of Chicago.

My educational training and experience gained while working with Professor Schultz this past year are most relevant to the position for which I am applying. I have aided Prof. Schultz on the theoretical questions underlying his forthcoming book on “The Theory and Measurement of Demand”, a subject intimately connected with consumption. In this connection I have had to survey the literature on demand and consumption. In addition to the theoretical work I have been in charge of related statistical studies and was largely responsible for the planning and direction of a statistical study of the demand for meats in the United States, on which study three statistical assistants were employed. In the course of the study I wrote several memoranda analyzing and interpreting the data and results. The results of the analysis are being published by Prof. Schultz in…[next page missing].”

Source: Milton Friedman Papers, Hoover Institution Archives, Box 5, Folder 11(Student years).

______________________________

[Course Description] 

  1. The Theory and Measurement of Demand.—A course covering such topics as the pure theory of demand; demand and utility in the theory of exchange; static and dynamic demand functions; different notions of elasticity of demand; various methods of deriving demand functions from family budget data and from time series of consumption and prices; etc. Prerequisite: Economics 301, a reading knowledge of French, and consent of the instructor. C.—2Cs., Autumn, 9:00, SCHULTZ.

 

Source: University of Chicago. Announcements: The College and The Divisons for the Sessions of 1934-35, pp. 286-7.

______________________________

REFERENCES FOR ECONOMICS 405

Theory and Measurement of Demand
by
Henry Schultz
University of Chicago

____

I. General Equilibrium

Bowley, A. L. Mathematical Groundwork of Economics
Divisia, Francois Économique Rationelle
Evans, G. C. Mathematical Introduction to Economics
Fisher, Irving Mathematical Investigations in the Theory of Value and Price,–in Transactions of the Connecticut Academy of Arts and Sciences (9-10) pp. 1-125.
Marshall, Alfred Principles of Economics
Pareto, Vilfredo +Manuel d’Économie Politique (especially Chap. III and Mathematical Appendix, pp. 539-594.)

+Cours d’Économie Politique (especially first 73 pages)

+Économie Mathématique, in Encyclopédie des sciences Mathématique, Tome I, Vol. 4, Fascicule 4, pp. 591-640.
Pietri-Tonelli, Alfonso Traité d’Économie Politique
Walras, Leon +Éléments d’Économie Politique
Zawadzki, Wl. Les Mathématiques Appliquées à l’Économie Politique

 

 

II. Utility Theory

A. Philosophical and Historical Background

Bentham, Jeremy Principles of Morals and Legislation
Edgeworth, F. Y. Mathematical Psychics
Halevy, Elie La Formation du Radicalisme Philosophique (French or English edition)
Jevons, W. Stanley Theory of Political Economy
Mitchell, Wesley C. “Bentham and the Felicific Calculus”, Political Science Quarterly, Vol. XXXIII, No. 2, June, 1918.
Stephen, Leslie The Utilitarians

 

B. Analytical and Statistical

Allen, R. G. D. “The Foundations of a Mathematical Theory of Exchange”, Economica, May, 1932.

+”The Nature of Indifference Curves”, The Review of Economic Studies, Vol. 1, No. 2, Feb., 1934, pp. 110-121.

+”A Comparison between Different Definitions of Complementary and Competitive Goods”, Economtrica, Vol. II, No. 2, April, 1934, pp. 168-176.
Allen, R.G.D., and Hicks, J.R. “A reconsideration of the Theory of Value”, Economica, Part I, Feb., 1934, pp. 52-76. Part II, May, 1934, pp. 196-219.
Evans, G. C. “The Role of Hypothesis in Economic Theory”, Science, Vol. 75, No. 1943, March 25, 1932, pp. 321-324.
Johnson, W.E. “The Pure Theory of Utility Curves”, Economic Journal, Vol. XXIII, No. 92, Dec., 1913, pp. 483-513.
Lange, Oscar “The Determinateness of the Utility Function”, The Review of Economic Studies, Vol. I, No. 3, pp. 218-226.
Schultz, Henry Review of Evans’ Mathematical Introduction in Journal of the American Statistical Association, Vol. XXVI, No. 176, Dec., 1931, pp. 484-91.

+”Interrelations of Demand”, Journal of Political Economy, XLI, 1933, pp. 468-512.
Thurstone, L. L. “The Indifference Function”, The Journal of Social Psychology, Vol. II, No. 2, May, 1931, pp. 139-67.
Zotoff, A. W. “Notes on the Mathematical Theory of Production”, Economic Journal, Vol. XXXIII, 1923, pp. 115-121.

 

C. Applications

Allen, R. G. D. “On the Marginal Utility of Money and Its Applications”, Economica, May, 1933.
Fisher, Irving “A Statistical Method for Measuring ‘Marginal Utility’ and Testing the Justice of a Progressive Income Tax”, in Economic Essays Contributed in Honor of John Bates Clark.
Frisch, Ragnar “Sur un Problème d’Économie Pure”, Norsk Matamatisk Forenings Skriften, 1926, Series 1, No. 16.

New Methods of Measuring Marginal Utility
Schultz, Henry “Frisch on the Measurement of Utility”, Journal of Political Economy, XLI, Feb., 1933, pp. 95-117.

+ Of special importance

 

________________________________

 

[Handwritten: Milton Friedman]

 

REFERENCES FOR ECONOMICS 405
Bibliography on Demand

__

Henry Schultz
University of Chicago

____

Derivation of Demand Curves
I. From Price [and] Quantity Data

A. The Moore Method

Moore, H.L. Economic Cycles: Their Law and Cause. New York, 1914.

Forecasting Yield and Price of Cotton. New York, 1917.

“Empirical Laws of Demand and Supply and the Flexibility of Prices”, PSQ, XXXIV, 1919.

“Elasticity of Demand and Flexibility of Prices”, JASA, XVIII, 1922.

“A Moving Equilibrium of Demand and Supply”, QJE, XXXIX, 1925.

“Partial Elasticity of Demand”, QJE, XL, 1926.

“A Theory of Economic Oscillations”, QJE, XLI, 1926.

Synthetic Economics, New York, 1929.
Schultz, Henry Statistical Laws of Demand and Supply, with Special Application to Sugar. Chicago, 1928.

Meaning of Statistical Demand Curves. English original of Der Sinn der Statistischen Nachfragekurven, Veroeffentlichungen der Frankfurter Gesellschaft fuer Konjunkturforschung, Heft 10. Bonn, 1930.

“The Shifting Demand for Selected Agricultural Commodities, 1875-1929”, Journal of Farm Economics, XIV, 1932, 201-27.

“A Comparison of Elasticities of Demand Obtained by Different Methods”, Econometrica, I, 1933, 274-308.

“Interrelations of Demand”, JPE, XLI, 1933, 468-512.
Lenoir, Marcel Études sur la Formation et le Mouvement des Prix. Paris, 1913.
Ezekiel, Mordecai “Statistical Analysis of the Laws of Price”, QJE, 1928.

“A Statistical Examination of Lamb Prices”, JPE, April, 1927.

 

B. The Leontief Method

Leontief, Wassily “Ein Versuch zur Statistischen Analyse von Angebot und Nachfrage”, Weltwirtschaftliches Archiv, Band XXX, Heft 1, 1929, pp. 1-53.
Schultz, Henry Meaning of Statistical Demand Curves, Appendix II, 99-118.
Frisch, Ragnar “Pitfalls in the Statistical Construction of Demand and Supply Curves”, Veroeffentlichungen der Frankfurter Gesellschaft fuer Konjunkturforschung, Neue Folge, Heft 5, Leipzig, 1933.
Leontief, Wassily “Pitfalls in the Construction of Demand and Supply Curves: A Reply”, QJE, XLVIII, 1934, 352-63.
Frisch, Ragnar “More Pitfalls in Demand and Supply Analysis: A Reply”, QJE, XLVIII, 1934, 749-55.
Leontief, Wassily “More Pitfalls in Demand and Supply Analysis: A Final Word”, QJE, XLVIII, 1934, 755-59.
Marschak, J. “More Pitfalls in Demand and Supply Analysis: Some Comments”, QJE, XLVIII, 1934, 759-67.

 

C. The (second) Pigou Method

Pigou, A.C. “The Statistical Derivation of Demand Curves”, EJ, XL, 1930, 344-400; reprinted in A.C. Pigou and D.H. Robertson, Economic Essays and Addresses. London, 1931.
Ferger, Wirth F. “Pigou’s Method of Deriving Demand Curves”, EJ, XLII, 1932, 17-26.
Cassels, J.M. “A Critical Consideration of Professor Pigou’s Method for Deriving Demand Curves”, EJ, XLIII, 1933, 574-87.
Allen, R.G.D. “A Critical Examination of Professor Pigou’s Method of Deriving Demand Elasticity”, Econometrica, II, July, 1934, 249-58.

 

D. Miscellaneous

Working, Holbrook “The Statistical Determination of Demand Curves”, QJE, XXXIX, 1925.
Working, E.J. “What do Statistical Demand Curves Show?” QJE, XLI, 1927, 212-35.
Gilboy, Elizabeth W. “Demand Curves in Theory and Practice”, QJE, XLV, 1930.

“The Leontief and Schultz Methods of Deriving ‘Demand’ Curves”, QJE, XLV, 1931, 218-61.
“Studies in Demand: Milk and Butter”, QJE, XLVII, 1932, 671-97.
Ferger, Wirth F. “The Static and Dynamic in Statistical Demand Curves”, QJE, XLVII, 1932, 36-62.

 

II. From Family Budget Data

A. The (first) Pigou Method

Pigou, A.C. “A Method of Determining Numerical Values of Elasticity of Demand”, EJ, XX, 1910, 636-40.

 

B. The Frisch Method

Frisch, Ragnar “Sur un Problème d’Économie Pure”, Norsk Matamatisk Forenings Skriften, 1926, Series 1, No. 16.

New Methods of Measuring Marginal Utility
Schultz, Henry “Frisch on the Measurement of Utility”, JPE, XLI, 1933, 95-117.

 

C. The Marschak Method

Marschak, Jakob Elastizitaet der Nachfrage, Beitraege zur Oekonomischen Theorie, 2, Tuebingen, 1931.
Frisch, Ragnar “Discussion of Marschak’s Method”, Revue d’Économie Politique, XLVI, 1932, 14-28.

 

D. The Roy Method

Roy, René La demande dans ses rapports avec la Répartition des Revenue”, Metron, VIII, 1930, 101-53.

“Les Lois de la Demande”, Revue d’Économie Politique, 1931, 1190-1218.

 

E. Miscellaneous

Gilboy, Elizabeth W. “Demand Curves by Personal Estimate”, QJE, 1932.
Waugh, Albert E. “Elasticity of Demand from Budget Studies”, QJE, 1932.
Bean, L. H. “The Farmer’s Response to Price”, Journal of Farm Economics, 1929.

“Measuring the Effect of Supplies on Prices of Farm Products”, Journal of Farm Economics, April, 1933.

 

N.B.

The references, with but one exception, are confined to works in English or French. For additional references see Schultz, Henry: “A Comparison…”, Econometrica, I, 1933, 274-308.

The abbreviations refer to the following periodicals:

EJ Economic Journal
JASA Journal of the American Statistical Association
JPE Journal of Political Economy
PSQ Political Science Quarterly
QJE Quarterly Journal of Economics

 

Source: The above transcription is based on the copy  in Milton Friedman Papers, Hoover Institution Archives, Box 5, Folder 12 (Student years). Another copy can be found in the George Stigler Papers, University of Chicago Archives, Addenda, Box 33, Folder “1935 University of Chicago Class Notes”. The copy in the Stigler notes is almost identical to the Friedman copy (with some hand-corrected titles and additions for apparent unintended omissions). Stigler’s notes to the course along with class hand-outs are found in the same folder.

Image Source: The only photo of Henry Schultz that I have ever come across is the one found to accompany Harold Hotelling’s paper and Paul Douglas’ paper in Econometrica (1939) honoring Schultz who died November 26, 1938 in a tragic automobile accident that also took the lives of his wife and two daughters.

Categories
Chicago Exam Questions

Chicago. Economic Theory Exams, A.M. and Ph.D. Summer 1949

The economic theory examination committee at the University of Chicago in the Summer Quarter of 1949  for the A.M. and Ph.D. degrees was made up of F. H. Knight (chair), O. H. Brownlee, M. Friedman, and  L. A. Metzler.  49 students took Part I of the exam (33 were Ph.D. students, 16 were A.M. students, equally divided between economics majors and minors). Part II of the examination was taken by 14 Ph.D. students (no A.M. students).  It does not appear that Knight participated in the grading of Part II however.

Two minor notes: Students were assigned numbers, presumably to assure anonymity with respect to their examiners, but the “unlucky” number 13 was not assigned to anyone. The “grade sheet” for the exams is labelled the “Report on Written Examination” which is similar to the use of the word “report” by the registrar’s office on official University of Chicago transcripts (for this usage, see the Patinkin transcripts).

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ECONOMIC THEORY, Part I
[August 2, 1949]

Written examination for the Ph.D. and A. M. Degrees, Summer Quarter, 1949

Ph.D. candidates: Time: 3½ hours. Answer all questions

A.M. Major candidates: Time: 3 hours. Answer question #2 and two others.

A.M. Minor candidates: Time: 2 hours. Answer question #2 and one other.

 

  1. (a) Discuss and evaluate alternative theories of “Profits” as a distributive share.
    (b) It is frequently said that in a private enterprise economy the producers’ motive is to maximize “profits”. Discuss the meaning of “profits” in this connection in relation to your answer to (a).
  1. Write briefly on the meaning of the capital concept and its importance in interpreting economic growth or change. Relate your discussion to the case of a Crusoe economy and state whether (and if so how) the principles are different for the competitive pecuniary social order.
  1. With reference to federal legislation assuring to every resident in the U.S.A. medical care by the physician and hospital of his choice, free and with no special taxation: Appraise the proposal as to effects upon general welfare, assuming that the alternative is the sale of medical insurance, not subsidized, but with the same distribution of personal income effected by cash “relief”.
  1. Briefly discuss the familiar diagram of a family of short-run cost curves for a firm, with an “envelope” as a long-run curve. State the main “cases” for price-equilibrium under monopoly and under “perfect competition.” Explain why the point of tangency with both curves descending may be such an equilibrium-supply, and particularly why it locates the minimum cost for the corresponding output.
  1. Briefly outline or list the main features of the Ricardian theories of value and of distribution and contrast each point with a “sound” modern view.”

__________________________________________

ECONOMIC THEORY, Part II
[August 4, 1949]

Written examination for the Ph.D. Degree, Summer Quarter, 1949.

Time: 2½ hours.

  1. Assume an economic system in which real expenditure upon goods and services (real consumption, investment, government expense) is a function of real income and the interest-rate; show that the set of values which satisfy the conditions for equilibrium in the commodity market (make real savings and investment equal) need not contain the “full-employment” income level; i.e., that level of real income which would be produced when the quantity of labor supplied equals the quantity demanded, both the labor supply and labor demand being functions of the real wage.
    Evaluate the assumptions of this system on terms of their realism, citing the relevant evidence; and indicate modifications which would result in the inclusion of the “full employment” level of income as one of the values satisfying the condition for equilibrium in the commodity market.
  1. Under the so-called “security-reserve proposal” member banks would be required to keep a supplementary reserve against deposits over and above the reserves they are now required to keep in the form of a deposit with a Federal Reserve Bank. This supplementary reserve could be in the form of government securities.a. What is the main purpose, or purposes, of this proposal?
    b. What effect would it have on the ability of the banks to expand credit, and how?
    c. In the light of present economic conditions, what can you say about the urgency of such a “reform”?
  1. It is a common view today that an equal reduction of both taxes and governmental expenditure would contribute to an increase of the national income or counteract a tendency to depression. State your position and discuss carefully.

Source: Hoover Institution Archives. Milton Friedman Papers, Box 76, Folder 10 “University of Chicago Econ. 300B”.

Categories
Bibliography Columbia Courses

Columbia. Fiscal policy. Depression deficits and war finance. Shoup, 1941

Carl S. Shoup (New York Times obituary) taught a course at Columbia in the business school with the title “The balancing of government budgets” that was listed with economics department course offerings as “Economics b114”. One finds this course listed in the annual Bulletin of the Faculty of Political Science beginning in the Spring session of 1938 and then every year through 1943 with the exception of 1940.

In this posting you will find his selected bibliographies on deficit financing in periods of depression and the special problem of financing defense and war.

______________________________

[Course Description]

Economics b114—The balancing of governmental budgets. 3 points Spring Session. Professor Shoup.

Tu. and Th. at 9. 415 Business.

An analysis of the factors governing the choice between normal recurring revenue, such as taxes, and extraordinary revenue such as loans, devaluation profits, etc. Particular attention is paid to the relations of public finance to money and banking in these problems.

Source: Division of History, Economics, Public Law, and Social Science. Courses offered by the Faculty of Political Science for the Winter and Spring Sessions 1940-41. Columbia University, Bulletin of Information, 40th Series, No. 29 (June 29, 1940), p. 38.

______________________________

In this posting I have assembled three selected bibliographies two of which are undated and all three are without attribution to Shoup or any university identification. Two of the bibliographies are identified as belonging to a course “Economics b114”. These bibliographies are found in two folders (“Student years” and “University of Wisconsin, Econ b114”) filed far apart (boxes 5 and 75, respectively) in the Milton Friedman papers at the Hoover Institution.

Milton Friedman taught at Columbia up through 1939-40 followed by a year at University of Wisconsin in 1940-41. None of the courses that Friedman taught at Wisconsin for which I found material in the his papers had a prefix “b” before the course number and it seems pretty unlikely (one would really need to consult the course catalogues for the University of Wisconsin to be sure…I have not) that the course numbering between the Columbia business school and the Wisconsin economics department would coincide.

I have concluded that the part of the Shoup reading list dealing with defense and war related finance was filed by a Hoover archivist with Friedman’s course materials at Wisconsin (incorrectly) because the date on that selected bibliography coincided with Friedman’s Wisconsin years (and perhaps it was actually found with materials from his business cycle class, Economics 176, at Wisconsin).

________________________

 

Economics b114
Selected Bibliography on Deficit Financing in Periods of Depression

Chase, Stewart, Idle Money, Idle Men

Clark, J. M., Economics of Planning Public Works

Clark, J. M., “An Appraisal of the Workability of Compensatory Devices,” American Economic Review, March, 1939 Supplement (Proceedings), pp. 194-208

Clark, J. M., “Effects of Public Spending on Capital Formation”, in National Industrial Conference Board, Capital Formation and its Elements, 1939.

Colm, G. and Lehmann, F., Economic Consequences of Recent American Tax Policy, Supplement I to Social Research, 1938, 108 p.

Colm, G. and Lehmann, F., “Public Spending and Recovery in the United States,” Social Research, May, 1936, Vol. III, 129-66.

Dennison, H. S. and others, Toward Full Employment, 1938, 297 p.

Eccles, Marriner, Economic Balance and a Balanced Budget (Weissman, editor)

Galbraith, J. K., The Economic Effects of the Federal Public Works Expenditures, 1933-1938, 131 p. 1940.

Galbraith, J. K., “Fiscal Policy and the Employment-Investment Controversy”, Harvard Bus. Rev., Autumn, 1939.

Gayer, Arthur, “Fiscal Policies,” American Economic Review, March, 1938 Supplement (Proceedings), 90-112. (Reprints on reserve at Business Library).

Gayer, A. D. and Rostow, W. W., How Money Works, Public Affairs Pamphlets No. 45, 1940, 30 p.

Gill, C., Wasted Manpower: The Challenge of Unemployment, 1939, 312 p.

Graham, B. L., “Storage and Stability – A Plan for Monetizing the Commodity Surplus”, in Roberts, Geo., A Forum on Finance, 1940.

Haley, B. F., “The Federal Budget: Economic Consequences of Deficit Financing,” Am. Eco. Rev., Feb., 1941, 67-87.

Hansen, A. H., Full Recovery or Stagnation? 1938, pp. 267-329.

Hicks, U. K., “Balancing the Budget” (Ch. XVII) and “Taxation and the Trade Cycle” (Ch. XVIII), in The Finance of British Government, 1920-1936. (1938)

Jaszi, G., “The Budgetary Experience of Great Britain in the Great Depression,” in Public Policy: A Yearbook (Harvard), 1940.

Kahn, R. F., “The Relation of Home Investment to Unemployment,” Economic Journal June, 1931.

Keynes, J. M., The General Theory of Employment, Interest and Money

Keynes, J. M., The Means to Prosperity

Keynes, J. M., NY. Times, Editorial page, June 10, 1934 (p. 1 of editorial section) and July 7, 1934.

Lerner, A. P., “Some Swedish Stepping Stones in Economic Theory,” Canadian Journal of Economics and Political Science, Nov., 1940, espec. p. 574-80.

Lutz, H. L., The Business Man’s Stake in Government Finance, Stanford Univ. 1939, espec. pp. 16-20, 23-44, 45-66.

Lutz, H. L., “The Failure of the Spending Policy,” N. Y. Sun, Jan. 6, 1940

Meyers, A. L., “Government Borrowing and Creation of National Income,” Chap. IV, in Modern Economic Problems. 1939.

Myers, M. G., Monetary Proposals for Social Reform, 1940, 191 p.

Myrdal, Gunnar, “Fiscal Policies in the Business Cycle,” A.E.R., 1939 Proceedings, 183-93.

Pigou, A. C., “Inflation, Deflation and Reflation,” Ch. IV in Economics in Practice, 1936.

Round Table on “The Workability of Compensatory Devices,” A.E.R. 1939 Proceedings, 224-29.

Samuelson, P. A., “Theory of Pump-Priming Reexamined,” Am. Eco. Rev., Sept., 1940, 492-506.

Seltzer, L. H., “Direct versus Fiscal and Institutional Factors,” Am. Eco. Rev. Feb., 1941, 99-107.

Slichter, Sumner, “Is America Finished?” N.Y. Sun, Jan. 6, 1940

Slichter, Sumner, “Profits and Prosperity,” Atlantic Monthly, Nov., 1938.

Smith, D. T., Deficits and Depression

Smith, D. T., “Is Deficit Spending Practical?” Harvard Bus. Rev., Autumn, 1939.

Smith, D. T., “An Analysis of Changes in Federal Finance, July 1930-1938 Rev. Econ. Statistics, Nov., 1938.

Smith, D. T., Review of Haley’s Paper, ibid., 88-98.

T.N.E.C., Hearings, Part 9: Hansen, Currie, etc.

Twentieth Century Fund, Debts and Recovery, 1938, 366 p.

U. S. Treasury, Borrower,” Fortune, January, 1939.

University of Chicago, Round Tables. “The Economics of Pump-Priming.” May 1, 1938, “Purchasing Power and Prosperity,” July 31, 1938.

Vanguard Press, An Economic Program for American Democracy.

Williams, John H., “Deficit Spending”, Am. Eco. Rev. Feb. 1941, 52-66.

 

Source: Milton Friedman papers, Hoover Institution Archives. Box 5, Folder 12 “Student years”. [Note above my reasons to believe this folder also has material not from Friedman’s “student years”.]

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Economics b114
Bibliography of Recent Materials Dealing with the Financing of Defense and War
February 5, 1941

American Council of Public Affairs, Economic Mobilization

Bowen, I., and Worswick, G. D. N., “The Controls and War Finance,” Oxford Econ. Papers, Sept., 1940.

Brown, F. H., and others, War Finance in Canada, 1940.

Clarke, R. W. B., The Economic Effort of War, London, 1940.

Connely, E.F., “Financing our Preparedness Program,” Banker’s Mag., Aug., 1940.

*Durbin, E.F.M., How to Pay for the War, London, 1939.

Editorial Research Reports, Methods of Financing War, June 3, 1940.

George, E.B., “Prices and Profits in a Defense Economy,” Dun’s Review, Nov., 1940.

*Greer, Guy, “Arming and Paying for It,” Harpers, Nov., 1940.

Hardy, C.O., “War and Capital Formation,” in Capital Formation and Its Elements, National Industrial Conference Board, 1939, pp. 134-50.

*Hardy, C.O., “Wartime Control of Prices,” 1940.

*Hart, A.G., Economic Policy for Rearmament, U. of Chicago Public Policy Pamphlet No. 33.

Kazekevitch, V.D., “The War and American Finance,” Science and Society, Spring, 1940.

*Keynes, J.M., How to Pay for the War, New York, 1940.

Morgan, S., “Deficit Financing in Germany,” in Roberts (editor), Forum on Finance, New York, 1939, pp. 3-22.

*Moulton, Harold G., Fundamental Issues in National Defense, Brookings, Jan. 13, 1941.

National Industrial Conference Board, Consumption, Savings, and Defense Financing, and Fiscal Possibilities for National Defense, Supplements to Economic Record, 1940.

*New Republic symposium: How to Pay for Defense, July 29, 1940 (Groves, Keynes, Chase, Cooke, Soule).

Pigou, A. C., “War Finance and Inflation,” Economic Journal, Dec., 1940.

Radice, E.A., “Consumption, Savings, and War Finance,” Oxford Economic Papers, Sept., 1940.

Riches, E.J., “Deferred Pay: the Keynes Plan,” Inter. Labor Review, June, 1940.

Robbins, L., “How Britain Will Finance the War,” Foreign Affairs, April, 1940.

Staudinger, H., and Lehmann, F., “Germany’s Economic Mobilization for War,” National Industrial Conference Board Economic Record, July 24, 1940.

*U.S. Government, Budget for Fiscal Year Ending June 30, 1942.

______________________________

The next page immediately follows the previous but it lacks a date and the formatting of the bibliography deviates from the previous two. Being alphabetically ordered and going from “Annals” to “Williams” with perhaps a quarter of empty page below, it is clearly a separate list. None of the titles are the same with the previous two lists, so I have presumed this is a likely update from the middle of the second session 1941.

______________________________

Annals, American Academy of Political and Social Science: Billions for Defense, March, 1941, 1-215.

Bach, G.L., “Rearmament, Recovery and Monetary Policy”, American Economic Review, March, 1941, 27-41.

Eccles, M. S., “Economic Preparedness for Defense and Post Defense Problems, Federal Reserve Bulletin, Jan., 1941.

Gilbert, R. V., and others, “Exploring the Factors Involved in Reemployment of Labor and Capital”, Savings Bank Journal, Dec., 1940.

Hansen, A. H., “Defense Financing and Inflation Potentialities,” Review of Economic Statistics, Feb., 1941.

Hearings, Public Debt Act of 1941: Committee on Ways and Means, Jan. 29 and 30, 1941, 106pp: Subcommittee of Committee on Finance, Feb. 12, 1941 47p.

Musgrave, R. A., “Inflationary Dangers of the Public Debt and the Tax System”, Taxes, Feb., 1941

Paul, R. E., and others, “Exploring the Financing of National Defense and Its Economic Consequences,” Savings Bank Journal, Oct., 1940

Plumptre, A. F. W., “An Approach to War Finance,” Canadian Journal of Economics and Political Science, Feb., 1941, 1-12.

Secretary of the Treasury, Report for Fiscal Year Ended June 30, 1940.

Stewart, Maxwell, “How Shall We Pay for Defense?” Public Affairs Pamphlet, No. 52, 1941.

Williams, John H. “Economic and Monetary Aspects of the Defense Problem,” Federal Reserve Bulletin, Feb. 1941

 

Source: Milton Friedman papers, Hoover Institution Archives. Box 75, Folder 2 “University of Wisconsin, Econ b114”. [Note above my reasons to believe this folder contains a reading list from the Shoup course at Columbia University.]

______________________________

Research Tip: Shoup Collection at Yokohama National University Library

“The Shoup Collection consists of 3,000 volumes of books, 100 titles of periodicals and enormous amount of documents held by an American economist Dr. Carl Sumner Shoup (1902-2000) who is known to have issued the report of Japanese tax system called “Shoup Mission.” In particular, the documents of his lecture notes, working memoranda and letters including those from Douglas MacArthur, Supreme Commander for Allied Forces, and from Shigeru Yoshida, former Prime Minister, are precious inheritances that can only be found at this library.”

______________________________

Image Source: The Columbia Spectator Archive. March 8, 1967.

 

 

 

Categories
Bibliography Columbia Courses Economists

Columbia. Economic History Course taught by Simkhovitch. Attended by Friedman, 1933.

Of six graduate courses taken for credit at Columbia University by Milton Friedman, one was taught by the Professor of Economic History, Vladimir Gregorievitch Simkhovitch — Economics 119. According to Friedman’s own listing of his coursework in economics found in his papers at the Hoover Institution Archives, he took Simkhovitch’s economic history course during the winter semester of the academic year 1933-34.

Simkhovitch was a multifaceted character and Universalgelehrter which can be loosely translated as an academic “utility infielder”. Because of his relative (or even absolute) obscurity now in the history of economics, here a bit of biographical information to chew on.

V. G. Simkhovitch was born in Russia in 1874, received his doctorate from Halle-Wittenberg (Germany) in 1898, and emigrated to the U.S. after completing graduate work where he began a fellowship at Cornell. He was hired by Columbia University in 1904 to teach economic history. Besides his economic history courses, Simkhovitch also regularly lectured on the subjects of socialist economics and Marxism until retiring from Columbia in 1942. Of considerably more note than himself was his wife Mary Melina Kingsbury, whom he met in Berlin during their student years. They married in New York City in 1899 with Mary Simkhovitch going on to become a prominent housing reform and neighborhood activist. Greenwich House, still in existence, was a model settlement house that she founded. Husband and wife were prominent enough, mostly thanks to her, to have their 50th wedding anniversary reported in the New York Times (January 6, 1949). Objects from Vladimir Simkhovitch’s art collections were reported in his obituary (New York Times, December 10, 1959) to have been displayed in the Metropolitan Museum of Art and the Pierrpont Morgan Library in New York as well as museums in Boston, Cleveland and Philadelphia. It is not difficult to find objects once owned by him in art auction house listings today.

__________________________

Eli Ginzberg’s recollections of Simkhovitch

In his brief memoir essay “Economics at Columbia: Recollections of the early 1930s” [The American Economist, vol. 34, No. 2, (Fall, 1990), 14-19], Simkhovitch does not come off well, certainly not personally.

“The hard core of the old department in addition to Seligman, Seager and Moore included Vladimir G. Simkhovitch who offered courses on socialism and economic history. Russian by birth and German by education, Simkhovitch, even with the perspective of time is not easy to characterize and even harder to evaluate. A collector of Chinese art and a grower of delphiniums in Perry, Maine, he was recognized as an expert in both fields. Most students, the bright as well as the dull, considered his lectures somewhat tedious distraction from serious work on contemporary economics; they had little interest in his exhaustion of the soil explanation for the decline of Rome or his Edward Bernstein-modified critique of Karl Marx. But a few of us recognized V.G.’s insightfulness and over looked his failings, defects which included a proneness for character defamation and vindictiveness as well as immature behavior toward female students.” p. 14.

“If the relations between the Graduate Economics Department and the School of Business were close and for the most part friendly, this was not the case with respect to the Graduate Economic Department’s attitude to the economists who taught in the undergraduate department headed by Rexford G. Tugwell. Tugwell fancied himself to be an expert in agricultural economics which may have brought him into conflict with Simkhovitch who devoted much of his time and energy to creating and maintaining feuds. The tension may have been nothing more than snobbery run riot. Tugwell did not teach any course in the Graduate Department of Economics. But I can personally attest to the fact that Tugwell was sensitive about collegial relations.” p. 17

Ahem…“immature behavior toward female students”!  Certainly not the first, nor regrettably the last…but definitely one of them.  It was good for Eli Ginzberg to have put that in the historical record. 

__________________________

[Course Description]

Economics 119—Economic history. 3 points Winter Session. Professor V. G. SIMKHOVITCH.
Tu., 2:10-3 in 401 Fayerweather and 4:10-5 in 302 Fayerweather.

A general survey of the chief phases of the economic development of classical antiquity, of the Middle Ages, and of modern times, as well as of historical approaches.

Source: History, Economics, Public Law, and Social Science: Courses Offered by the Faculty of Political Science for Winter and Spring Sessions, 1933-34. Columbia University, Bulletin of Information, 33rd Series, No. 26 (March 25, 1933)

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ECONOMIC HISTORY

V. Simkhovitch “Approaches to History”

I Political Science Quarterly, December 1929 S
II         [ditto]                             December, 1930 S
III       [ditto]                              September, 1932 R

Towards an Understanding of Jesus R
Rome’s Fall Reconsidered S
Hay and History S
Marxism v. Socialism Chapter on the Economic Interpretation of History

 

R         Roth Clausing The Roman Colonate 5-62

R         F. de Coulanges The Origin of Property in Land 1-73; 149-52

S          Buecher         Industrial Evolution 83-151

R         Edward Meyer Entwicklungsgeschichte des Altertums in Kleine Schriften Vol. 81-160

R         H. Bradley      Enclosures in England 11-45; 72; 85; 105-7

S         Seligman The Economic Interpretation of History 1-24; 146-186

R         Schoenberg “Zunftswesen im Mittelalter” Jahrbucher fur Nationaloekonomie und Statistik 1867

R         Renard           Guilds in the Middle Ages 1-26; 32-67; 73 -115

R         Brentano       History and Development of the Guilds

R         Cunningham Growth of English Industry and Commerce, Paragraphs 61, 72-7, 84, 103, 122, 128, 149-9

S          Ashley Introduction to English Economic Theory and History, Volume I pp. 1-113

R         Toynbee Industrial Revolution Chapters 7 and 8

R         Toutain          The Economic Life of the Ancient World Chapters 5-6

R  Read                      S   Study carefully

 

Source: Milton Friedman Papers. Hoover Institution Archives. Box 5, Folder 12, “Student years”.

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Image Source: Standing Royal Figure. Brooklyn Museum, Gift of Helena Simkhovitch in memory of her father, Vladimir G. Simkhovitch.

 

 

 

 

Categories
Chicago Courses

Chicago. Price Theory. Econ 300 A&B. Friedman Readings ca 1947

 

 

When compared to the list of Milton Friedman’s reading assignments for Economics 300 A&B for 1948, we note that the following handwritten list of readings taken from the student notes of Norman M. Kaplan who attended both 300A and 300B during the Winter Quarter 1947 do not include the 1947 items found in the 1948 list:

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

*Dennison, S. R., “The Problem of Bigness,” Cambridge Journal, Nov. 1947.

This leads me to conclude that we indeed have the assigned Winter Quarter readings for Friedman’s second iteration of Economics 300A and his first iteration of Economics 300B. There is much more in Kaplan’s student notes, but this is enough for one posting.

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[undated, handwritten copy by Norman M. Kaplan]

Friedman’s readings 300 A&B

 

F. H. Knight, “Social Econ. Organization”; “The Price System & the Econ. Process” (in The Economic Organization, pp. 1-37)

 

Marshall

Bk III, ch. 2, 3, 4,5
Bk V, ch. 1,2,3,4,5,12, Appendix H
Bk IV, ch. 1, 2, 3
Bk V, ch 6
Bk VI, ch. 1-5           (ch. 1,2 done)

 

H. Schultz, Meaning of Statistical Demand Curves, pp. 1-10
E.J. Working, “What do Statistical ‘Demand Curves’ Show?”

 

Knight, Risk, Uncertainty, and Profit, ch 3
Hicks, J. R., Value and Capital, Part I (pp 11-37)
W. A. Wallis & M. Friedman, “Empirical Derivation of Indifference Functions” (in Lange, Studies in Math. Econ. & Econometrics, U of C Press)

 

A. L. Myers, Elements of Modern Economics, ch 5, 7, 8, 9
J. Robinson, Econ. of Imperfect Competition, ch 2 (in 209 notes)
J. M. Clark, Econ. of Overhead Costs, ch 9
J. Viner, “Cost Curves and Supply Curves”
E. Chamberlin, Theory of Monopolistic Competition, ch 3, secs. 1, 4, 5, 6; ch 5
R. F. Harrod, “Doctrines of Imperfect Competition”, QJE, May 1934, esp. sec. 1, pp. 442-61

 

J. B. Clark, Distr. of Wealth, Preface, ch 1, 7, 8, 11, 12 (in 209 notes), 13, 23

 

J. S. Mill, Prin of Pol Econ, Book II, ch 14
Hicks, Theory of Wages, ch 1-6 (in 209 notes)
Smith, Wealth of Nations, Bk I, ch 10

 

Friedman and Kuznets, Income from Independent Professional Practice,

Preface, pp. v to x,
ch 3, sec 3, pp. 81-95,
ch 4, sect 2, pp. 118-137,
app to ch. 4, sec 1 & 3, pp 142-151, 155-61

 

F.H. Knight, “Interest” in Ethics of Competition
Keynes, GT [General Theory], ch 11-14

 

Cassell, Fundamental Thoughts in Econ, ch. 1, 2,3
[____], The Theory of Social Economy, ch 4

 

Hicks, “Keynes & the Classics”, Econometrica, Apr 1937, pp. 147-159
Modigliani, “Liquidity Preference & the Theory of Interest & Money,” Econometrica, Jan 1944, esp. Part I, sec. 1 through 9, sec 11 through 17, part II, sec 21
Pigou, “Classical Stationary State,” Econ Journal, Dec 1943, pp. 343-51

 

Source: Kaplan, Norman Maurice. Papers, Box 1, Folder 8, Special Collections Research Center, University of Chicago Library

Image Source: The Mont Pelerin Society webpage “About MPS”.