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Harvard and Chicago. Harvard Class of 1873 reports from J. Laurence Laughlin 1879-1913


James Laurence Laughlin (1850-1933)
was the founding head of the Department of Political Economy at the University of Chicago. One earlier post provided a mid-career biographical sketch of Laughlin and another his proposal at Cornell to expand the economics course offerings. Also of interest is his list of suggested titles for a personal library of economics as of 1887.

When compared to the notes submitted to the respective Harvard Class Secretaries,   Frank W. Taussig (Class of 1879) or Robert Franz Foerster (Class of 1909), Laughlin appears to have had a less intense filial attachment to his alma mater.

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1879

JAMES LAWRENCE [sic] LAUGHLIN.

Secretary has heard nothing from him. At last accounts he was teaching school in Boston

Source: The Second Triennial Report of the Secretary of the Class of 1873 of Harvard College. Boston, Geo. H. Ellis Press, Commencement 1879. Page 18.

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1883

JAMES LAWRENCE [sic] LAUGHLIN.

Received degree of Ph. D. from Harvard in 1876 and was appointed instructor in Political Economy in 1878. Has been made Assistant Professor in the same department the current year. Has been a contributor to the “Atlantic,” “International,” etc. Was married September 9, 1875, to Alice McGuffey of Cincinnati. A daughter, Agatha, was born January 3, 1880, and his wife died January 11, 1880.

Source: The Third Triennial Report of the Secretary of the Class of 1873 of Harvard College. Newport, Davis & Pitman, Commencement 1883. Page 17.

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1885

JAMES LAWRENCE [sic] LAUGHLIN.

Assistant professor of political economy at Cambridge. Has published ” Laughlin’s Mill’s Political Economy,” and written a few magazine articles. Was married to Miss H. M. Pitman, Sept. 4, 1883.

Source: The Fourth Triennial Report of the Secretary of the Class of 1873 of Harvard College. Boston, Rand, Avery, & Co., Commencement 1885. Page 14.

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1888

JAMES LAURENCE LAUGHLIN.

626 Chestnut St., Philadelphia. “I have written a new book : ‘The Elements of Political Economy; with some applications to Questions of the Day,’ in 1887, and it has gone into a second edition. ‘Gold and Prices since 1873;’ a study on the so-called appreciation of gold, etc., etc. My ‘History of Bimetalism,’ has gone into its second edition; and my edition of ‘Mill,’ into its fourth or fifth. I have resigned my position in Cambridge, and

have come to Philadelphia to take the management of an Insurance Co., the ‘Philadelphia Manufacturers Mutual Fire Insurance Co.;’ but shall continue my economic writing.”

Source: The Fifth Triennial Report of the Secretary of the Class of 1873 of Harvard College. Boston, S. J. Parkhill & Co., Commencement 1888. Page 21.

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1891

JAMES LAWRENCE [sic] LAUGHLIN.
“I am Professor of Political Economy and Finance at Cornell University and see Jack White every day. These are my two distinctions since last writing.”

[…]

HORATIO STEVENS WHITE.

“I have just finished my third year as Dean of the Faculty. This spring I was called to the chair of Germanic languages in the new Stanford University, Palo Alto, California. The trustees here meanwhile appointed me as head of the German department with an increase in salary. The California offer however remains open, and I shall visit the Pacific coast next winter and study the situation on the spot before coming to a final decision. Our Faculty baseball nine, which has been organized for several years, continues to win a majority of its games with various student clubs. The chair of Political Economy left vacant by the resignation of Professor E. B. Andrews, who was elected President of the Brown University, has been filled by the appointment of our classmate Laughlin, who has occupied the position this year with general acceptance. As a result of his efforts the trustees have decided to appoint an associate professor in the department, to establish two special fellowships in Political Economy, and to place at his disposal a generous publication fund. The University is to be congratulated upon this able contribution which ’73 has thus made to our Faculty.”

Source: The Sixth Triennial Report of the Secretary of the Class of 1873 of Harvard College. Boston, S. J. Parkhill & Co., Commencement 1891. Pp. 19, 39.

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1898

JAMES LAWRENCE [sic] LAUGHLIN.

5747 Lexington Ave., Chicago, I11. Taught school in Boston, and took degree of Ph.D. at Cambridge in 1876. Was appointed instructor in Political Economy at Harvard in 1878 and Assistant Professor in 1883. In 1888 he was in Philadelphia, where he had the management of the Philadelphia Manufacturers’ Mutual Fire Insurance Co. Subsequently he was Professor of Political Economy and Finance at Cornell, and is now at Chicago University in a similar capacity. He has devoted much time to writing on political economy and finance, and has published some important books on those subjects.

Source: The Seventh Report of the Secretary of the Class of 1873 of Harvard College Issued upon the Twenty-fifth Anniversary of Graduation. Boston, S. J. Parkhill & Co., Commencement 1898. Page 23.

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1905

JAMES LAWRENCE [sic] LAUGHLIN.

Since 1892 he has been Head Professor of the department of Political Economy in the University of Chicago. For some years he has been editor of the “Journal of Political Economy.” He served on the Monetary Commission appointed by the Indianapolis Convention of Boards of Trade, in 1898, and was entrusted with the preparation of the report which appeared in a volume of six hundred and eight pages. In 1894 he was invited to prepare a currency law for Santo Domingo. The visit to the island on a special steamer, the negotiations with the government, the enactment of the law and its provisions, were subsequently published in the “Journal of Political Economy.” In 1902 he published the first volume of a magnum opus on money. This volume, “The Principles of Money,” will be followed by five succeeding volumes “when time is granted to finish them.” In addition to this work he has written many books and articles treating of the various phases of his specialty in this and other countries.

Source: The Eight Report of the Secretary of the Class of 1873 Harvard. Boston, Rockwell and Churchill Press, Commencement 1905. Pp. 23-4.

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1913

JAMES LAURENCE LAUGHLIN.

Is at the head of the Department of Political Economy at Chicago, and an authority on finance whose reputation is world-wide. At the Three Hundredth Jubilee of the University of Giessen, Germany, in 1907, he was given an Honorary Doctorate. He writes:

“Any modest member of the Class of 1873 does not feel that he has done anything worth reporting. In 1906 I was appointed by the German Kultus Ministerium an exchange professor from the University of Chicago to Berlin. I lectured in German before the Vereinigung für Staatswissenschaftliche Fortbildung, and also in Cologne, as well as at the University of Berlin. In the winter of 1908-09, I was one of two delegates (the other being Professor A. A. Michaelson, the recipient of a Nobel Prize) to the Scientific Congress of all American Republics in Santiago, Chile. I crossed the Andes, visiting Argentina, and came home by the east coast. In June, 1911, I was given leave of absence from the University in order to take charge of the nation-wide campaign to obtain a reconstruction of our currency and banking system. In this work I was chairman of the Executive Committee of the National Citizens’ League for the promotion of a sound banking system. The results of this campaign are now apparent. Not only is there an insistent and intelligent public opinion demanding reform, but the new administration is ready to put a satisfactory measure through Congress. It now looks as if the purpose of this campaign was certainly attained. Of course I have been guilty off and on of publishing some books and articles, but they are not as good as I should like to have them, and when I get to the next world I am going to revise them and make them just what they ought to be for an audience that I hope will not yet be made up very largely of the Class of 1873. For I hope that the surviving members of the class will long be here after I have departed.”

Source: The Ninth Report of the Secretary of the Class of 1873 Harvard. Boston, Rockwell and Churchill Press, Commencement 1913. Pp. 25-6.

Image Source: Clipped from printed speech given at the 78th meeting of The Sunset Club at the Grand Pacific Hotel, Chicago, December 6, 1894 found in Laughlin, James Laurence. Papers, [Box 1, Folder 17], Special Collections Research Center, University of Chicago Library.

 

 

 

 

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Economists Harvard Princeton

Harvard. Economics Ph.D. Alumnus. Robert Franz Foerster, 1909


Robert Franz Foerster (b. July 8, 1883; d. July 29, 1941) was the son of the American composer Adolph Martin Foerster, earned his BA from Harvard a year ahead of his class and went on at Harvard to earn a Ph.D. in economics on the topic of Italian emigration. The first twenty years of his career following his undergraduate education is sketched in the following four notes he submitted to the secretary of the Class of 1906. Foerster went on to become Professor of Industrial Relations at Princeton University. Some details about his undergraduate years can be gleaned from the Secretary’s First Report Harvard College Class of 1906, Cambridge, Crimson Printing, June 1907.

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1912

ROBERT FRANZ FOERSTER

Graduating in 1905, as of 1906, I spent in Europe fourteen months of 1905-1906, travelling in England, France, Germany, Switzerland, Austria, Hungary, Italy, Holland and Belgium. For four months I was in Italy, for five in Berlin, where I took courses at the university. In the fall of 1906 I returned to Harvard, where for three years I was in the Graduate School. In 1909 I received the degree of Ph.D. in economics, my thesis dealing with Italian emigration. From 1908-1909 I was an assistant at Harvard in social ethics, from 1909-1911 an instructor, and since 1911 an instructor on the Faculty. I am chairman of the Immigration Committee of the American Unitarian Association and director of the Social Research Council of Boston. The latter has recently been affiliated with the department of social ethics, with offices in Emerson Hall, Cambridge. Books or plays of my authorship: “A Statistical Survey of Italian Emigration,” Quarterly Journal of Economics, November, 1908; “The French Old Age Insurance Law of 1910,” Quarterly Journal of Economics, August, 1910; “The British National Insurance Act,” Quarterly Journal of Economics, February, 1912; reviews and translations in economic journals; bibliographies in “A Guide to Reading in Social Ethics and Allied Subjects,” Harvard University, 1910. Member: American Economic Association, American Statistical Association, American Association for Labor Legislation. Business address: Harvard University, Cambridge, Mass. Present residence: 71 Perkins Hall, Cambridge, Mass.

 

Source:   Secretary’s Second Report Harvard College Class of 1906, Cambridge, Crimson Printing, June 1912, pp. 99-100.

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1916

ROBERT FRANZ FOERSTER

Born              Pittsburgh, Pa., July 8, 1883.

Parents         Adolph Martin Foerster, Henrietta Margaret Reineman.

School           Central High School, Pittsburgh, Pa.

Years in College 1902-1905.

Degrees         A.B., 1905 (1906); Ph.D., 1909.

Occupation   University Professor.

Address        (home) 11 Shady Hill Square, Cambridge, Mass. (business) Emerson Hall, Harvard University, Cambridge, Mass.

I have continued to teach in the department of social ethics at Harvard. In 1913 I was promoted to an assistant professorship. Upon the retirement of Dr. Peabody, early in that year, Professor Ford and I took over the conduct of the course “Social Ethics 1” which our predecessor had for many years given as “Philosophy 5″—the first course of a department, established in 1906, which has continued to grow both in courses and in student enrolments. In 1912 I was appointed by Governor Foss chairman of a commission to study the question of the dependency of widows’ families. Our report was presented to the legislature in January of the following year. In the spring, after a considerable fight, a measure providing a system of “mothers’ aid,” based partly on the commission’s bill, was enacted. During the summer of 1913, in an absence from America of six or seven weeks, I journeyed, via the Azores, Madeira, and Algiers, to Sicily, Calabria, and Basilicata, regions in which I had become interested in a study of Italian emigration; I returned via the Tyrol, Switzerland, and France. The summer of 1914 I spent largely in Cambridge, doing a piece of work for Dr. Mackenzie King in connection with the department of industrial relations newly established by the Rockefeller Foundation. In these several years I have maintained connections with various social and philanthropic enterprises. In 1915 I became engaged to Miss Lilian Hillyer Smith, Radcliffe 1915, of Forest Hills, Mass, subsequently of Princeton, N. J. After our marriage, we expect to settle, in the fall, in No. 11 Shady Hill Square, Cambridge. I have written: Report (majority) of the Massachusetts Commission on the Support of Dependent Minor Children of Widowed Mothers (Boston, 1913). Member: Colonial Club, Cambridge, Harvard Club of Boston, American Economic Association, American Association for Labor Legislation, American Statistical Association.

 

Source:   Secretary’s Third Report Harvard College Class of 1906, Cambridge, Crimson Printing, 1916, pp. 139-40.

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1921

ROBERT FRANZ FOERSTER

Address:       (home) 11 Shady Hill Sq., Cambridge, Mass.

Occupation: University Professor.

Married:       Lilian Hillyer Smith, Princeton, N. J., June 5, 1916.

I continued after the War broke out to teach at Harvard, and by the Spring of 1918 was the only person left teaching in my department. I had been overworking for a considerable period and suffered a breakdown in April, 1918. Though I continued to teach for the remainder of the Spring Term, I found it impossible to return to the University in the Fall. The Fall and Winter were devoted to the effort to regain my health and included a considerable stay in Johns Hopkins Hospital. At the end of March, 1919 I returned to Harvard to teach. Last Summer (1920) I went abroad with my wife, returning in much sounder health than when I went away, and to-day I regard myself as quite restored to health. (But what an absurdly common thing it is for professor folk at some stage or other to go to pieces!) Late in 1919 I published a comprehensive volume on Italian emigration, which had been on my hands for some years and which I had virtually completed, except for seeing through the press, by the Spring of 1918.

Have written: “The Italian Emigration of our Times” (558 pages). (Published by Harvard University Press, Cambridge, Mass., December, 1919.)

Member: American Economic Association; American Association for Labor Legislation; American Statistical Association.

 

Source:   Harvard College Class of 1906, Fifteenth Anniversary Report (No. 4), Cambridge, Massachusetts: University Press, 1921, pp. 112-113.

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1926

ROBERT FRANZ FOERSTER

Address:       4 College Rd., Princeton, N. J.

Occupation:  Economist.

Married:       Lilian Hillyer Smith, Princeton, N. J., June 5, 1916.

Children:      Lilian Egleston, born April 16, 1922; Margaret Dorothea, born October 15, 1924.

In the summer of 1920 I went with my wife to Europe, visiting scenes familiar and unfamiliar. In the late summer of the following year I entered upon various field studies dealing with labor relationships, first in Colorado and subsequently in Western Pennsylvania, and chiefly concerned with the coal industry.

In the summer of 1922 I was appointed to a professorship of economics in Princeton University, where my duties were essentially those of a director of the Industrial Relations Section, an organization interested mainly in constructive action in the field of industrial relations. My immediate duty here was the assembling of documentary information on labor relationships. I have had unusual opportunities for contact with employers and with representatives of the employed and have traveled considerably to places where interesting activities were being carried on.

During my free time in recent years I have undertaken advisory or research work in labor subjects. The results of one such employment, undertaken for the Secretary of Labor, were published in 1925 under the title “The Racial Problems Involved in Immigration from Latin America and the West Indies to the United States,” and brought a variety of interesting reactions.

            Have written: “The Italian Emigration of our Times” (558 pages). (Published by Harvard University Press, Cambridge, Mass., December, 1919.) Various articles; and a report, “The Racial Conditions Involved in Immigration from Latin America and the West Indies to the United States,” published by the Department of Labor, Washington, 1925.

Member: American Economic Association; American Statistical Association; American Association for Labor Legislation; American Management Association; Advisory Committee, Washington Branch Internal Labor Office; Committee on Immigration of Social Science Research Council; Committee on Personnel Management of American Management Association.

 

Source:   Harvard College Class of 1906, Twentieth Anniversary Report (No. 5), Cambridge, Massachusetts: University Press, 1926, pp. 95-96.

Image Source: Assistant Professor of Social Ethics, Robert Franz Foerster in Harvard Album 1920.

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Economists Harvard

Harvard. Seven Personal Reports to the Class of 1879, Frank Taussig. 1882-1914


Serendipity struck again during an unrelated search of hathitrust.org. This time I stumbled across Harvard class reports  (i.e. B.A. cohorts) irregularly submitted by the secretaries of the respective classes and published as part of the annual Harvard commencement exercises (e.g. for the Class of 1879). I decided to sample the reports for the biggest gun in the Harvard economics department at the turn of the 20th century, Frank W. Taussig, and was delighted to find what turns out to be essentially personal notes written to his classmates about the course of  his post-undergraduate career. Today I provide Taussig’s notes from the second through eighth reports of the Class of 1879.

In a later post  I shall provide information about Taussig’s undergraduate life from information culled from the Class of 1879/Secretary’s Report/No. I./1879.

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1882

[p. 98-99]

FRANK WILLIAM TAUSSIG.

“In September, 1879, I went abroad with E. C. Felton. After spending a few weeks together in London, we separated. I went to Germany, and spent a winter, from October till March, at the University of Berlin, studying Roman Law and Political Economy. In March, I left Germany, and rejoined Felton in Italy. We spent two months together in Italy, and then went to Paris, by way of Geneva. In Paris, in May, we again separated, Felton going to England, on his way home, while I travelled in different parts of Europe, chiefly in Austria and Switzerland. I returned to America in August, 1880. In September, 1880, I went to Cambridge, intending to enter the Law School. The position of secretary to President- Eliot was offered me and accepted. Since this time, I have continued to act as secretary to the President, and have, at the same time, studied for the degree of Ph.D., which I hope to obtain in June, 1883. The special subject which I have studied for the degree has been the History of the Tariff Legislation of the United States. In March, 1882, was appointed instructor in Political Economy, in Harvard College, for the year 1882-83. While in Europe, wrote some articles, which were published in the New York Nation.”

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. II. Commencement, 1882.

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1885

[pp. 34-35]

EDGAR CONWAY FELTON.

(April 26.)—” You will remember that my communication for the last Triennial Report reached you too late for insertion, so I will begin my contribution to your second report with my graduation.

“In September, 1879, Frank Taussig and I started for Europe together. We stayed in London about a month enjoying ourselves hugely, and among other short excursions going to Oxford, where I had a cousin, an undergraduate in New College, who gave us rather exceptional facilities for observing this the oldest of the English Universities. In London we separated, I going to Paris where I stayed about six weeks, sight-seeing and attending occasional lectures at the University. From Paris I went to Vienna, stopping on the way at Munich. Christmas and New Year’s I was in Vienna with my uncle, who has lived there for about thirty years. Then I went south to Rome, where I found Ned Hale, and many a pleasant walk and talk we had together in the Eternal City. Here Frank Taussig joined me again, having finished a semester at the University, and we started off together, going though the Italian cities, making the tour of the Italian lakes, and crossing into Switzerland by the Simplon. After a short stay in Paris I started for home, taking a run through some of the cathedral towns of England and into Scotland on the way…

 

[pp. 65-66]

FRANK WILLIAM TAUSSIG.

(February 8.)—” I have lived in Cambridge since the date of the last Class Report. In 1882 I was appointed instructor in Political Economy in Harvard College, and devoted my time for the year 1882-3 entirely to teaching, and work of that kind. In the course of that year I published an essay on ‘Protection to Young Industries as Applied in the United States,’ which gave the results of investigations in the economic history of the country in the years 1789-1830. In June, 1883, I received the degree of Doctor of Philosophy from Harvard University.

“In the fall of 1883 I entered the Harvard Law School with the intention of taking the regular three years course, and of practising after I got through the school. At the same time I continued my connection with the college as instructor in Political Economy, having been re-appointed to that office. I gave a course on the Tariff History of the United States, a subject to which I have given special attention. During the past year (1884-5) I have continued my studies in the Law-School as a second-year student, and have also continued as instructor in the college, giving the same course as in the previous year.

“In 1884, I wrote an introductory notice to the English translation of Laveleye’s ‘Elements of Political Economy,’ and added a supplementary chapter on some economic questions of present practical importance. In 1885 I published a second small volume on economic history, this being a ‘History of the Existing Tariff. It gives an account of the tariff legislation of the country from 1860 to 1883, with more or less comment from the point of view of one who adheres to the principle of free trade. I have written occasionally for the newspapers, on economic questions, chiefly for the Boston Herald and Advertiser, and a little for the New York Nation. I have been, and am still, a member of the committee to edit the Civil Service Record, a monthly paper published for the promotion of civil service reform, and have written regularly for it.”

Is a member of the Massachusetts Reform Club, and of the Cobden Club. Since April 1 has conducted the course on American History in the college during the absence of Hart.

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. III. Commencement, 1885.

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1890

[p. vi-viii]

…In 1886 our classmate Taussig was appointed Assistant Professor of Political Economy, a signal honor for so young a man, the next to the youngest in the class. In April of that year a movement was started in the class to raise funds to equip a special library and reading-room for the Political Economy department of the college, the money to be used under Taussig’s direction. Six hundred and seventy-five dollars and seventy cents was raised and formally presented to the President and Fellows of Harvard College, and gratefully accepted by them.

The names of the subscribers are as follows, the subscriptions ranging from one to one hundred dollars: Almy, Andrews, Amen, Baily, Baylies, Bissell, Brooks, Burr, Carey, Cary, Churchill, R. W. Ellis, Evans, Felton, Gilbert, Hale, S. H. Hill, Hoadly, Holmes, Hubbard, Hudson, Hyde, Keene, Kidder, C. J. Mason, McLennan, Rindge, Sheldon, Somerby, St. John, H. Stetson, Taussig, Thorp, Trimble, Urquhart, Warren, Wright.

In June, 1887, Taussig furnished the following account of the way the money had been used and the practical working of the room:

“Of the sum contributed by members of the class ($675.70), about $400 has so far been expended for books. We have gone slowly in buying books, as needs change from time to time and better selection was likely to be got by buying when a want arose, rather than by anticipating wants. A considerable number of books will probably be added next year, but even as it stands, the collection is fairly complete for certain courses, and is exceedingly useful. It contains the works of the classic economists, like Adam Smith, Ricardo, Malthus most of them in duplicate; and also the works of the leading economists of more recent times, such as Cairnes, Sidgwick, Marshall, Jevon, Rogers, Walker, among English writers; Wagner, Cohn and Schoenberg, among German; and Bastiat and Leroi-Beaulieu among French. Many of these also are duplicated. There is a good working collection on tariff and financial matters for the United States, on railroads and on economic history in general. A considerable number of dictionaries and books of reference have been put in, such as ‘Lalor’s Political Science Cyclopaedia,’ the French ‘Dictionnaire d’Économie Politique,’ McCulloch’s “Commercial Dictionary,’ Kolb’s ‘Condition of Nations.’

“In addition there are a number of government publications, which are by no means the least useful part of the library. Besides the statistical abstracts of the United States, England and France, there are sets of United States Census Reports (including a full set of the census of 1880), Massachusetts Census Reports, the Finance Reports (U. S.) since 1870, Reports of the Comptroller of the Currency since 1876, the Statutes at Large, a full set of the Massachusetts Labor Reports, documents and reports on railroads and tariff legislation, and important foreign documents, such as the well-known British Reports on the Depreciation of Silver (1876) and on Railroads (1881). Among the periodicals kept on file are the Financial Chronicle, The Railroad Gazette, The Political Science Quarterly and our own [Quarterly] Journal of Economics.

“The library has undoubtedly been of great service to instructors and students. It has been very freely used by the latter, and it has been a frequent and pleasant experience to hear their expressions of acknowledgment of the aid and pleasure it has given them.

“It is interesting and significant that a similar plan is to be put in operation next year in the department of American History and Politics. A Working Library is to be provided, and will probably be put in the room now used for the Political Economy Library, so that the two will be used together. The money comes in a way from our class, being given in memory of our classmate, Glendower Evans, whose death last year made so sad a gap in our ranks.”

Each volume bears a neat book plate stating that it is given by members of the Class of 1879 to the Political Economy Department.

 

[pp. 86-88]

FRANK WILLIAM TAUSSIG

(Cambridge, April 2.)—”In 1885-86 I took my third year at Harvard Law School, receiving the degree of LL. B. in June, 1886. But some months before this I had been offered and had accepted an appointment as Assistant Professor of Political Economy in Harvard University, and in the fall of 1886 entered on the duties of that position. Since then I have lived the uneventful life of a college teacher. I was so fortunate as to be appointed just in time to take part in the celebration of the 250th anniversary of the founding of the University, and, being then the youngest member of the faculty, seem to have a better chance than any other member of taking part in the 300th anniversary when that comes around.

“On June 29, 1888, I was married at Exeter, N. H., to Edith Thomas Guild, of Boston, daughter of George Dwight Guild, of the class of ’45, and of Mary Thomas Guild (now Mrs. William H. Gorham). On May 3, 1889, we had born a son, William Guild Taussig. During the past summer (1889) we have built a house on land formerly belonging to Professor Norton, off Kirkland Street, and hope to live here in peace and quiet for many years to come.

“In connection with my teaching work, I have written and published on economic topics. Most of my writing has been for the Quarterly Journal of Economics, which was established by the University in 1886. In 1888 I published a volume entitled, ‘The Tariff History of the United States,’ made up, with revisions and additions, of the two smaller books published previously (on ‘Protection to Young Industries’ and on the ‘History of the Present Tariff’), and of the two other essays on tariff history mentioned in the subjoined list, which I have prepared at the request of our inquisitive Secretary. During the year 1889-90, in the absence of Professor Dunbar, I have edited the [Quarterly] Journal of Economics.

“In 1888 I was elected a fellow of the American Academy of Arts and Sciences. I am also a member of various scientific societies, to which my work naturally leads me, such as the American Economic and Historical Associations and the Political Economy Club. The list of my publications since 1885, not including minor articles in periodicals, is, in chronological order:

( 1) “Translation, with comment, of Wagner on the Present State of Political Economy; Quarterly Journal of Economics, October, 1886.

(2) “The Southwestern Strike of 1886; ibid., January, 1887.

(3) “Translation of Soetbeer’s Materials on the Silver Question, undertaken for the government, and published in Mr. Edward Atkinson’s Report on Bi-metallism, 1887.

(4) “A Suggested Re-arrangement of Economic Study; Quarterly Journal of Economics, January, 1888.

(5) “The Tariff of 1828; Political Science Quarterly, March, 1888.

(6) “The Tariff, 1830-1860; Quarterly Journal of Economics, April, 1888.

(7) “The Tariff History of the United States; New York, G. P. Putnam’s Sons, 1888.

(8) “How the Tariff Affects Wages; The Forum, October, 1888.

(9) “Some Aspects of the Tariff Question; Quarterly Journal of Economics, April, 1889.

(10) “Political Economy and Business; The Harvard Monthly, June, 1889.

(11) “Workmen’s Insurance in Germany; The Forum, October, 1889.

(12) “The Silver Situation in the United States; Quarterly Journal of Economics, April, 1890.

“I have also done a good deal of miscellaneous editorial work on the Quarterly Journal of Economics in arranging letters and appendix matter, and in writing notes and memoranda, and have written occasionally for the Nation and other papers. My address is 2 Scott Street, Cambridge, Mass.”

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. IV. Commencement, 1890.

________________________________

1895

[pp. 95-8]

FRANK WILLIAM TAUSSIG.

(Florence, Italy, April 9.)—Since our last report, my life has moved in the easy current of the University stream, in which it seems likely to remain for the rest of my days. In 1892 I was promoted from the Assistant Professorship, which I then held, to a Professorship of Political Economy, and in the following year was made Chairman of the Department of Economics. As the tenure of a professorship is for good behavior, and as I trust I shall neither behave ill nor become useless to the University, I may hope to live in Cambridge and work for Harvard until I die.

“Among domestic happenings, I can report the birth of a second child, Mary Guild Taussig, on May 8, 1892.

“Becoming entitled, under the University regulations, to a sabbatical year, I determined to take advantage of the opportunity, and accordingly am spending this year (1894-95) in Europe. We left home in early October, and sailed direct for the Mediterranean. After a stop at Gibraltar and a glimpse of Spain, we proceeded to Naples, and remained for over two months in Southern Italy. I took a flying trip to Sicily, but spent most of the time with my family at the Island of Capri, which I can recommend to weary travelers in search of quiet and peace, beautiful scenery, healthful air, and quaint people. Thence we moved to Rome, where another two months passed pleasantly and where I learned something of Italian public affairs and of Italian economic literature. During the winter I have added to my professional equipment by acquiring a reading knowledge of Italian. We are in Florence at this writing and shall move north with the season.

“Among other happenings which have left an impression in my memory, I mention a trip to Washington in 1892, as member of a committee sent from Boston to protest against threatened legislation for free silver. I got a glimpse of President Harrison and of other prominent public men, which was interesting and instructive. Of a very different sort, but no less interesting, and much more satisfactory in its tangible results, was a trip to the woods of Maine in the summer of 1894, with R. W. Lovett, ’91, during which I first experienced the delights of trout fishing.

“In University politics, I am a firm advocate of the shortening of the College course to three years, and of the modification of the admission requirements in such manner as no longer to give Greek any preference or premium among the subjects that may be offered by candidates. On the vexed athletic question I have made a confession of my faith in an article in the Graduate Magazine for March of this year. In University finances I am a firm believer in the endowment of higher education in general, of Harvard University in particular, and of the Political Economy Department of Harvard University in special particular. In politics I am a disgusted independent, awaiting the appearance of a new party that shall stand squarely on the platform of a moderated tariff, sound money, and, above all, civil service reform and honest government. I may mention here that in 1893-94 I was a member of the School Committee of the City of Cambridge, and should have gladly continued to fill that modest public office had not the sabbatical vacation made it necessary for me to resign.

“The tale of my interests and activity is best told by my publications. Residing, as I do, far away from home, I cannot give any such a complete list of them as the ever methodical Almy would wish, but can recall enough to indicate what subjects have occupied my attention. In 1892 a second edition of my ‘Tariff History of the United States’ was published, in review and much enlarged form. In 1891 (I am not sure of the exact date) appeared a monograph on the ‘Silver Situation in the United States,’ first issued by the American Economic Association, and afterwards published in a second and enlarged edition by the firm of Putnam’s. I have contributed freely to periodicals, and especially to the Quarterly Journal of Economics, published by the University. In that journal I recall the following papers: ‘A Contribution to the Theory of Railway Rates,’ 1891; ‘Reciprocity,’ 1892; ‘The Duties on Wool and Woolens,’ 1893; ‘The Wages-Fund Doctrine at the Hands of German Economists,’ 1894. I gave aid and comfort to the enemy in 1893 by contributing to the Yale Review an article on ‘Recent Investigations on Prices in the United States.’ In 1894 there appeared, simultaneously in the Economic Journal of England and the Political Science Quarterly of New York, a paper on ‘The Tariff of 1894.’ My very last article is on ‘II Tesoro degli Stati Uniti’ (The Treasury of the United States), which appeared in the Giornale degli Economisti in March, 1895. This I will confess not to have written in Italian; it was translated from my manuscript. I may mention that in 1890-91 this same Italian Giornale degli Economisti had an article of mine on the McKinley tariff act, which was afterwards translated in the English Economic Journal, and finally became the basis of the chapter on the tariff of 1890 in the second edition of my ‘ Tariff History.’ During this winter (1894-95) I have been at work completing a book on ‘Some Aspects of the Theory of Wages,’ which I hope to give to the press on my return home in the autumn.

“I am the American correspondent of the British Economic Association, and in that capacity have contributed various shorter articles to the journal published by that Association. I am told that the position as correspondent has caused me to be regarded in some quarters as a suborned and traitorous enemy to American prosperity, but I am content to accept it as an honorable appointment from a body of distinguished men of science.

“My address is 2 Scott street, Cambridge, off Kirkland street, where classmates who may pilgrimize it to Cambridge will always be welcome.”

 

[pp. 134-5]

Taussig.—

“The Tariff History of the United States.” First edition, New York, 1888; second revised and enlarged edition, New York, 1892. (Of this volume, two parts had previously appeared in independent form; an essay on “Protection to Young Industries, as Applied in the United States,” in two editions, Cambridge, 1883, and New York, 1884; and a “History of the Present Tariff, 1860-1883,” New York, 1885. The other parts of the volume had also been previously published in the form of periodical articles for the Quarterly Journal of Economics and for the Political Science Quarterly. All were revised for the first and second editions of the book.)

“The Silver Situation in the United States.” First edition, Baltimore, 1892 (in the publications of the American Economic Association); second revised and enlarged edition, New York, 1893.

“Introductory Note and Supplemental Chapter to Laveleye’s Elements of Political Economy,” New York. 1884.

“Translation of Soetbeer’s Materials toward the Elucidation of the Economic Questions Affecting the Precious Metals,” undertaken for the Department of State. U. S. Senate Executive Documents, Fiftieth Congress, first session, No. 34, pp. 57-286, 1888.

“The Southwestern Strike of 1886,” Quarterly Journal of Economics, January, 1887.

“Prices in Great Britain, Germany, France and the United States,” (with J. L. Laughlin), Quarterly Journal of Economics, April, 1887.

“The Tariff Literature of the Campaign of 1888,” Quarterly Journal of Economics, January. 1889.

“A Contribution to the Theory of Railway Rates,” Quarterly Journal of Economics, July, 1891.

“Reciprocity,” Quarterly Journal of Economics, October, 1892.

“Recent Literature on Protection,” Quarterly Journal of Economics, January, 1893.

“The Wages Fund Doctrine at the Hands of German Economists,” Quarterly Journal of Economics, October, 1894.

“Recent Discussions on Railway Management in Prussia,” Quarterly Journal of Economics, October, 1894.

“How the Tariff Affects Wages,” Forum, October, 1888.

“Political Economy and Business,” Harvard Monthly, June, 1889,

“Workmen’s Insurance in Germany,” Forum, October, 1889.

“The Working of the New Silver Act of 1890,” Forum, October, 1890.

“La Tarifa McKinley,” Giornale degli Economisti, January, 1891. “The McKinley Tariff Act,” a translation of the preceding; Economic Journal, July, 1891.

”The Homestead Strike,” Economic Journal, June, 1893.

“Why Silver Ceases to be Money,” Popular Science Monthly, Sept., 1893.

“Results of Recent Investigations on Prices in the United States,” Yale Review, November, 1893. Also printed in the Bulletin of the International Statistical Institute.

“The United States Tariff of 1894,” published simultaneously in the British Economic Journal for December, 1894, and in the Political Science Quarterly of New York, for December, 1894.

“II Tesoro degli Stati Uniti,” Giornale degli Economisti, April, 1895.

In addition various articles and book reviews in the Nation, book reviews in the Political Science Quarterly, and notes and memoranda in the Quarterly Journal of Economics.

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. V. Commencement, 1895.

________________________________

1900

[pp. 99-100]

FRANK WILLIAM TAUSSIG.

(Cambridge, May 4.)—”My last biographical instalment for our reports was written in April, 1895, at Florence, Italy, in the course of a sabbatical year spent abroad. I returned to Cambridge in September of 1895, and since then have been steadily in academic harness; and the happenings in my life have been such as naturally come to a University Professor. I have had plenty of work to do in teaching, for the resort of students to the department of political economy is large and growing. The introductory course (what used to be Political Economy —now Economics) has over 500 students, and the more advanced courses have numbers in proportion. The lectures to these 500 men — the instruction is now in good part by lectures — I find a serious tax on my strength, but also a great source of satisfaction, since they give an inspiring opportunity of reaching the mass of the undergraduates.

“A good part of my time of late years has been given to my editorial duties on the Quarterly Journal of Economics, the University’s publication in my subject. In 1896, Professor Dunbar resigned from the post of editor, to which I was appointed by the corporation. The Journal attained high repute among students of economics under Professor Dunbar’s management, and it is my endeavor to maintain the standard which he set. I have also acted, since 1896, as Chairman of the Publication Committee of the American Economic Association, and in that capacity have had still further editorial and administrative work to do. In 1897 I was appointed by Governor Wolcott member of a commission to examine and report upon the laws on taxation in the State of Massachusetts, and, being chosen Secretary of the commission, gave much time and labor to its investigations. Indeed, the report of the commission, though it presented, of course, not my own conclusions but those of the commission as a whole, was drafted almost entirely by myself, and occupied me throughout the summer of 1897. In the winter of 1897, and again in 1898, I was sent to the Indianapolis Monetary Convention as delegate from the Boston Merchants’ Association. In 1896 I was elected a member of the School Committee of the City of Cambridge, and have served on the committee since that date.

“This year (1900) wrote three considerable articles in consecutive numbers of the Quarterly Journal of Economics,— two on the ‘Iron Industry of the United States,’ one on the ‘New Currency Act’ wrote another article on the ‘Currency Act’ for the British Economic Journal; prepared an article on ‘Tariffs’ for the new edition of the Cyclopedia Britannica; and delivered a Commencement Address on ‘Education for the Business Man’ before the University of Missouri, on July 4th.

“I append a list of my writings [see Bibliographical Record], which indicates what subjects have chiefly engaged my attention.”

Married in 1888: one son, three daughters.

 

[p. 130]

Taussig.—

“Wages and Capital: An Examination of the Wages Fund Doctrine,” New York, D. Appleton & Co., 1896.

Also, new editions of older books:

“The Silver Situation in the United States,” third enlarged edition, New York, Putnam’s, 1896.

“The Tariff History of the United States.” Fourth enlarged and revised edition, New York, G. P. Putnam’s Sons, 1898.

Articles in the Quarterly Journal of Economics, published for Harvard University:

“The Employer’s Place in Distribution” ; Vol. X., October, 1895.

“Rabbeno’s ‘American Commercial Policy'”; Vol. X., October, 1895.

“The International Silver Situation”; Vol. XI., October, 1896.

“The Tariff Act of 1897”; Vol. XII., October, 1897.

“The United States Treasury in 1894-96” ; Vol. XIII., January, 1899.

“The Iron Industry in the United States: I. A Survey of Growth; II. The Working of Protection”; Vol. XIV., February and August, 1900.

“The Currency Act of 1900 ” ; Vol. XIV., May, 1900.

”Bond Sales and the Gold Standard,” Forum, November, 1896.

“The United States Tariff Act” (of 1897), British Economic Journal, December, 1897.

“The Taxation of Securities” (an address delivered at the University of Michigan), Political Science Quarterly, March, 1899.

“The Problem of Secondary Education, as Regards Training in Citizenship,” Educational Review, May, 1899.

“Charles Franklin Dunbar” (an obituary sketch), Harvard Monthly, February, 1900.

 

[p. 137]

MARRIAGE AND BIRTH RECORD

TAUSSIG EDITH THOMAS GUILD Exeter, N.H., June 20, 1888
William Guild Cambridge, Mass., May 3, 1889.
Mary Guild Cambridge, Mass., May 8, 1892.
Catharine Crombie Cambridge, Mass., Dec. 8, 1896.
Helen Brooke Cambridge, Mass., May 24, 1898.

 

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. VI. Commencement, 1900.

________________________________

1905

[pp. 112-3]

FRANK WILLIAM TAUSSIG (Cambridge, Massachusetts, May 10). “I am sorry to say that I have not much to show for the last five years. In 1901 I felt seriously the strain of overwork, and was compelled to spend two years in complete idleness. I went abroad with my family in the autumn of 1901, expecting to need only one year for recovery; but a second year proved to be needed, and it was not until 1903 that we returned. We spent the first winter at Meran, in the Austrian Tyrol, the summer of 1902 in Switzerland, and the greater part of the winter of 1902-03 on the Italian Riviera. In the autumn of 1903 I resumed my work in the University, and was able to carry on my teaching work, but not to do a great deal besides. During the current academic year (1904-05), I have been able to accomplish more, but do not yet feel that I have recovered full working strength.

“In the course of 1899-1900 I published in the Quarterly Journal of Economics two articles on the ‘Iron Industry in the United States,’ and a third article on the ‘Currency Act of 1900.’ These were the last things I was able to achieve for a considerable time. In 1904 I was elected President of the American Economic Association, and prepared a presidential address, which was delivered at the meeting of the Association at Chicago in December, 1904, on the ‘Present Position of the Doctrine of Free Trade.’ Having been re-elected President of the Association, I am now preparing a second address, to be delivered in 1905. I resumed the editorship of the Quarterly Journal of Economics, which continues to flourish, and holds, I believe, no unworthy place among the publications of the University.

“In 1901 the title of my post in the University was changed, or rather my appointment was changed. Having previously simply been Professor of Political Economy, I was made Henry Lee Professor of Economics. The Lee professorship was founded by the widow and children of the late Colonel Henry Lee, and is the first endowed professorship established at the University in my subject.”

 

Source: Harvard College. Class of 1879. Secretary’s Report. No. VII., 1905.

________________________________

1914

[pp. 293-8]

FRANK WILLIAM TAUSSIG, son of William and Adèle (Würpel) Taussig, was born at St. Louis, Missouri, December 28, 1859. He entered Harvard from Washington University in October, 1876, as a sophomore.

In September, 1879, he went abroad with E. C. Felton. After a few weeks together in London they separated, and Taussig went to Germany, where he remained until March, 1880, studying Roman law and political economy at the University of Berlin. In March he again joined Felton, and spent the next two months with him in Italy and at Paris. In May they again separated, and Taussig traveled for a time in Europe, chiefly in Austria and Switzerland. During his stay in Europe he wrote several articles for the New York Nation. He returned to America in August, and in September went to Cambridge, intending to enter the Law School; but the position of secretary to President Eliot was offered him, and he accepted it and at the same time began study for the degree of Ph.D., selecting as his special subject the history of the tariff legislation of the United States. In March, 1882, he was appointed instructor in political economy at Harvard for the year 1882-83. He resigned his secretaryship and during the next year devoted all his time to his teaching and the work connected with it. “In the course of that year,” he wrote, “I published an essay on ‘ Protection to Young Industries as Applied in the United States,’ which gave the results of investigations in the economic history of the country in the years 1789-1830. In June, 1883, I received the degree of Ph.D. from Harvard University.” In the fall of 1883 he entered the Harvard Law School, “with the intention of taking the regular three years’ course and of practising after I got through the School.” At the same time he continued his work as instructor in political economy, giving a course on the tariff history of the United States. “In 1884 I wrote an introductory notice to the English translation of Laveleye’s ‘Elements of Political Economy’ and added a supplementary chapter on some economic questions of present practical importance. In 1885 I published a second small volume on economic history, this being a ‘ History of the Existing Tariff.’ It gives an account of the tariff legislation of the country from 1860 to 1883, with more or less comment from the point of view of one who adheres to the principle of free trade.” He wrote at this time occasionally for the Boston Herald and Advertiser and for the Nation and was a member of the committee to edit the Civil Service Record, a. monthly paper published for the promotion of civil service reform, and wrote regularly for it. He joined the Massachusetts Reform Club and the Cobden Club. During the spring of 1885 he conducted the course on American history at Harvard in the absence of A. B. Hart, ’80, the regular instructor.

In June, 1886, he graduated from the Law School, with the degree of LL.B. Meanwhile he had been offered and had accepted an appointment as assistant professor of political economy at Harvard, and in the fall of 1886 entered on the duties of that position. “Since then,” he wrote in 1890, “I have lived the uneventful life of a college teacher. … In connection with my teaching work, I have written and published on economic topics. Most of my writing has been for the Quarterly Journal of Economics, which was established by the University in 1886. In 1888 I published a volume entitled ‘The Tariff History of the United States,’ made up, with revisions and additions, of the two smaller books published previously . . . and of the two other essays on tariff history” (on “The Tariff of 1828,” published in the Political Science Quarterly for March, 1888, and “The Tariff, 1830-1860,” published in the Quarterly Journal of Economics for April, 1888). During the year 1889-90, in the absence of Professor Dunbar, he edited the [Quarterly] Journal of Economics. In 1888 he was elected a fellow of the American Academy of Arts and Sciences. He had also become a member “of various scientific societies, to which my work naturally leads me, such as the American Economic and Historical associations and the Political Economy Club.”

In 1892 he was made professor of political economy at Harvard and, in the following year, chairman of the department of economics. In 1892 he went to Washington as a member of a committee sent from Boston to protest against threatened legislation for free silver. “I got a glimpse of President Harrison and of other prominent public men, which was interesting and instructive. Of a very different sort, but no less interesting and much more satisfactory in its tangible results, was a trip to the woods of Maine in the summer of 1894 with R. W. Lovett, ’91, during which I first experienced the delights of trout fishing.” The year 1894-95 he spent in Europe with his family, remaining for two months in southern Italy and then passing two months in Rome before going further north. He continued to contribute freely to various periodicals, especially to the Quarterly Journal of Economics. “I gave aid and comfort to the enemy in 1893 by contributing to the Yale Review an article on ‘Recent Investigations on Prices in the United States.’ . . . My very last article,” he wrote from Florence, Italy, in April, 1895,” is on ‘ II Tesoro degli Stati Uniti’ . . . which appeared in the Giornale degli Economisti in March, 1895. This I will confess not to have written in Italian; it was translated from my manuscript.” In 1890-91 he had published an article in the Giornale on the McKinley tariff act, which was afterwards translated in the English Economic Journal, and finally became the basis of the chapter on the tariff of 1890 in the second edition of his

“Tariff History.” As the American correspondent of the British Economic Association he had contributed various articles to the journal published by the association. “In politics,” he wrote at this time, “I am a disgusted independent, awaiting the appearance of a new party that shall stand squarely on the platform of a moderated tariff, sound money and, above all, civil service reform and honest government…. In 1893-94 I was a member of the school committee of the city of Cambridge, and should have gladly continued to fill that modest public office had not the sabbatical vacation made it necessary for me to resign.”

In 1896 Professor Dunbar resigned as editor of the Quarterly Journal of Economics, and Taussig was appointed by the President and Fellows to succeed him. In the same year he was made chairman of the Publication Committee of the

American Economic Association, involving much editorial and administrative work. In 1897 he was appointed by Governor Wolcott member of a commission to examine and report upon the laws on taxation in the State of Massachusetts, and as secretary of the commission gave much time and labor to its investigations. The drafting of its report was almost entirely his work and occupied him throughout the summer of 1897. In the winter of 1897, and again in 1898, he was sent to the Indianapolis Monetary Convention as delegate from the Boston Merchants’ Association. In 1896 he had been elected again a member of the school committee of Cambridge, and was still serving on the committee when he wrote for the Class Report of 1900. Besides articles in the Quarterly Journal of Economics, he had written an article on the “Currency Act” for the British Economic Journal, had prepared an article on “Tariffs” for the new edition of the Encyclopedia Britannica and had delivered a commencement address on “Education for the Business Man” before the University of Missouri, July 4, 1900. In 1901 he was appointed to the newly established Henry Lee professorship of economics, founded in memory of the late Colonel Henry Lee by his widow and children, and the first endowed professorship established at Harvard in the department of economics. That year the strain of overwork compelled him to go abroad for rest. After two years in Europe with his family he returned, and in the fall of 1903 resumed work in the University. In 1904 he was elected president of the American Economic Association, and at its annual meeting at Chicago in December, 1904, delivered an address on ” The Present Position of the Doctrine of Free Trade,” which was printed in the Publications of the Association, February, 1905. He was reelected president of the Economic Association, and at the annual meeting in December, 1905, delivered an address on “The Love of Wealth and the Public Service,” which was printed in the Publications of the Association, February, 1906, and also in the Atlantic Monthly for March, 1906.

He writes, July 28, 1912, “My life during the past seven years has been quiet, the winters at work in Cambridge, the summers spent at our house at Cotuit. I continue to conduct nearly the same courses as in previous years, and give a large part of my energy to Economics I, the first course in the subject, and now the largest elective course on the College list. It is the policy of our department, and indeed of the College in general, not to put the much frequented general courses into the hands of young instructors, but to keep them under the older and more experienced members of the teaching staff. Not a few descendants of ’79 have sat under me during the past decade. In the spring of 1912 I took a brief journey to Europe as representative of the Boston Chamber of Commerce at an international meeting at Brussels. There is to be an International Congress of Chambers of Commerce in Boston in September, 1912, and I have been asked to act as chairman of the Committee on Programme for that congress. For the settlement of the programme it was necessary that some one should meet the representatives of the other countries taking part in the congress, and I was asked to appear for the Boston Chamber. I had a pleasant journey, spending a couple of weeks in London and there seeing something of men in public life. Among publications the chief has been my ‘Principles of Economics,’ in two volumes, published by Macmillan in the autumn of 1911. It is the result of many years of teaching and reflection, and its writing has occupied most of my spare time since our last report.”

He was married at Exeter, New Hampshire, June 20, 1888, to Edith Thomas Guild of Boston, daughter of George Dwight Guild of the Class of ’45 and Mary Thomas Guild, now Mrs. William H. Gorham. She died April 15, 1910. Their children are: William Guild, born at Cambridge, May 3, 1889; Mary Guild, born at Cambridge, May 8, 1892; Catharine Crombie, born at Cambridge, December 8, 1896; and Helen Brooke, born at Cambridge, May 24, 1898.

Taussig’s address is 2 Scott Street, Cambridge, Massachusetts.

Source: Harvard College. Class of 1879. Secretary’s Report. No. VIII. Commencement, 1914.

Image Source: Frank Taussig from Harvard Album 1900.

Categories
Berkeley Economists Harvard

Harvard Ph.D. Alumnus (1906) and Berkeley Professor Stuart Daggett

I have my eye out for such Faculty memorial minutes like the following from the University of California System for Berkeley professor Stuart Daggett. In the previous post you can find the list of fields chosen by Daggett for his doctoral examination.

___________________________

 

Stuart Daggett, Transportation Engineering: Berkeley
by E. T. Grether, I. B. Cross, and P. S. Taylor

Stuart Daggett was born on March 2, 1881, in Milwaukee, Wisconsin. His career ended on December 22, 1954, at his home in Berkeley. It was characteristic of him that on the same day on which his final illness struck him, he had been at the University collecting materials dealing with the St. Lawrence Seaway. Although he had just sent to his publisher the revised manuscript of the fourth edition of his monumental Principles of Inland Transportation, first published in 1928, he was already beginning another major investigation. His physician has remarked that it would have been mental and physical bondage for Stuart Daggett to have given up systematic scholarly pursuits.

Stuart Daggett received all three of his degrees, the A.B. in 1903, the A.M. in 1904, and the Ph.D in 1906, from Harvard University. During 1906 to 1909 he was Instructor at Harvard, but in 1909 accepted appointment to the University of California as Assistant Professor of Railway Economics on the Flood Foundation. From that day until his death he was a faculty member at Berkeley. When he came to the campus he joined that small, distinguished pioneering company of scholars in economics, which then included Adolph C. Miller, Wesley Clair Mitchell, Carl Copping Plehn, Lincoln Hutchinson, Jessica B. Peixotto, A. W. Whitney, and Henry Rand Hatfield. Professor Daggett was the last surviving member of this group. His notable contributions to teaching, research, scholarly writing, and University and public service over the years more than amply justified the wisdom of the University administration in bringing him into this extraordinarily able assembly of economists. Only six years after his arrival at the University, he was appointed Professor of Transportation on the Flood Foundation.

Professor Daggett was the author of numerous books, contributions to scholarly publications, and reviews. Among his most significant publications were Railroad Reorganization, Chapters on the History of the Southern Pacific, Principles of Inland Transportation (four editions), Railroad Consolidation West of the Mississippi River, and Structure of Transcontinental Railroad Rates.

Professor Daggett was often called upon to render federal, state, and local public service. In 1912 he served as expert for a committee to advise the governor of California on the equalization of taxes. During World War I, he was with the War Industries Board, Division of Planning and Statistics. In 1924 he was expert for the Presidential Committee on Coördination of Rail and Water Facilities. During World War II, he was public member of various War Labor Board panels. He also made important contributions to private industry in various ways, including publication in trade papers, participation in business conferences, and acting as private arbitrator.

Professor Daggett’s greatest influence, however, was through his services as a teacher, administrator, and colleague on the faculty of the University of California. In the classroom his lectures were marked by extraordinary care in preparation and presentation. Running through the orderly discussion were numerous evidences of subtle humor, much to the delight of those students whose thirst for knowledge included also an appreciation of the lighter touch. His judicious temperament and ability in carrying heavy responsibilities brought him many demands in University government and administration. From 1920 to 1927 he was Dean of the College of Commerce (replaced by the School of Business Administration in 1943). The truest evidence of his stature among his colleagues was his inevitable membership or chairmanship on those committees concerned with the most serious, urgent, and critical issues of University government. Over the years, he was a member or chairman of almost all of the leading committees of the Academic Senate, and in 1948 became its Vice-Chairman. In 1951, on the recommendation of the Senate committee, he was elected Faculty Research Lecturer, the highest accolade bestowed by the Academic Senate.

Stuart Daggett was truly one of the great statesmen of the University of California. In a sense, too, he may be characterized as a “professor’s professor,” for he possessed to a high degree so many of the talents and qualities characteristic of the academic scholar–objectivity, meticulous precision, unyielding integrity, high standards of performance and personal dignity. His intimates and members of his immediate family realized that behind his reserve and dignity there was also warm friendliness, kindliness, affection, and a high degree of sensitivity.

 

Source: Academic Senate of the University of California System. University of California: In Memoriam [1957], pp. 45-47.

Image Source:  University of California Yearbook. Blue and Gold, 1922.

 

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Fields Harvard

Harvard. Subjects Chosen by Economics Ph.D. Candidates for Examination, 1905

 

This posting lists seven graduate students in economics who took their subject examinations for the Ph.D. at Harvard between December, 1904 and June, 1905.  The examination committee members, academic history, general and specific subjects are provided along with the doctoral thesis subject, when declared. Lists for 1903-04,  1915-16, and 1926-27 were posted previously. In the same archival box one finds lists for the academic years 1902-03 through 1904-05, 1906-07 through 1913-14, 1915-16, 1917-18 through 1918-19, and finally 1926-27. I only include graduate students of economics (i.e. not included are the Ph.D. candidates in history and government).

Titles and dates of Harvard economic dissertations for the period 1875-1926 can be found here.

______________________________

DIVISION OF HISTORY AND POLITICAL SCIENCE
EXAMINATIONS FOR THE DEGREE OF PH.D.

1904-05

 

Stuart Daggett.

General Examination in Economics, Thursday, December 1, 1904.
Committee: Professors Taussig, Ripley, Carver, Gay, and Andrew.
Academic History: Harvard College, 1899-1903; Harvard Graduate School, 1903-05; A.B. (Harvard) 1903; A.M. (ibid.) 1904.
General Subjects: 1. Economic Theory and its History. 2. Sociology and Statistics. 3. Money, Banking and Commercial Crises. 4. Labor Problems and Industrial Organization. 5. History of American Institutions. 6. English Economic History to 1800.
Special Subject: Transportation.
Thesis Subject: “Railroad Reorganization.” (With Professor Ripley.)

Lincoln Hutchinson.

General Examination in Economics, Wednesday, April 12, 1905.
Committee: Professors Taussig (chairman), Emerton, Bullock, Gay, Andrew, and Sprague.
Academic History: University of California, 1882-84, 1887-89; Harvard University, 1892-Jan. 1894, 1898-99; Ph.B. (Univ. of Calif.) 1889; A.B. (Harvard) 1893; A.M. (ibid.) 1899.
General Subjects: 1. Economic Theory and its History. 2. Economic History to 1750. 3. Money, Banking and Commercial Crises. 4. Public Finance and Taxation. 5. Commercial Geography. 6. History of Political Institutions in Mediaeval Europe, including England.
Special Subject: International Trade: its History, Theory, and Present Position.
Thesis Subject: “Ten Years’ Competition (1894-1903) for Markets in Brazil and the River Plate.”

Lincoln Hutchinson.

Special Examination in Economics, Monday, April 24, 1905.
Committee: Professors Taussig (chairman), Ripley, Gay, Andrew, and Sprague.
(See above.)

Joseph Clarence Hemmeon.

General Examination in Economics, Friday, May 26, 1905.
Committee: Professors Carver (chairman), Macvane, Hart, Bullock, Gay, and Sprague.
Academic History: Acadia College (N.S.), 1894-98, 1902-03; Harvard Graduate School, 1903-05; A.B. (Acadia) 1898; A.M. (ibid.) 1903; A.M. (Harvard) 1904.
General Subjects: 1. Economic Theory and its History. 2. Modern Economic History of Europe and Economic History of the United States from 1789. 3. Sociology and Social Reform. 4. Public Finance and Financial History. 5. Modern Government. 6. History of England since 1685, and History of the United States since 1763.
Special Subject: Sociology and Social Reform.
Thesis Subject: Not yet announced.

Vanderveer Custis.

Special Examination in Economics, Wednesday, June 7, 1905.
General Examination passed May 20, 1904.
Committee: Professors Taussig (chairman), Ripley, Bullock, Sprague, and Wyman.
Academic History: Harvard College, 1897-1901; Harvard Graduate School, 1901-04; A.B. (Harvard) 1901; A.M. (ibid.) 1902.
Special Subject: Industrial Organization.
Thesis Subject: “The Theory of Industrial Consolidation.” (With Professor Ripley).

James Alfred Field.

General Examination in Economics, Monday, June 12, 1905.
Committee: Professors Taussig (chairman), Ripley, Carver, Gay, Castle, and Dr. Munro.
Academic History: Harvard College, 1899-1903; Harvard Graduate School, 1903-05; A.B. (Harvard) 1903.
General Subjects: 1. Economic Theory and its History. 2. Economic History. 3. Sociology. 4. Labor Problems and Industrial Organization. 5. The Sociological Aspect of the Evolution Theory. 6. International Law.
Special Subject: Sociology.
Thesis Subject: (Not yet announced.)

Albert Benedict Wolfe.

Special Examination in Economics, Monday, June 19, 10 a.m. 1905.
General Examination passed May 11, 1904.
Committee: Professors Taussig (chairman), Ripley, Carver, Bullock, and Andrew.
Academic History: Harvard College, 1899-1902; Harvard Graduate School, 1902-04; A.B. (Harvard) 1902; A.M. (ibid.) 1903.
Special Subject: Modern Economic Theory.
Thesis Subject: “The Lodging House Problem in Boston, with some Reference to Other Cities.” (With Professor Ripley).

William Hyde Price.

Special Examination in Economics, Tuesday, June 20, 1905.
General Examination passed April 13, 1904.
Committee: Professors Taussig (chairman), Ripley, Carver, Bullock, and Gay.
Academic History: Tufts College, 1897-1901; Harvard Graduate School, 1901-05; A.B. (Tufts) 1901; A.M. (ibid.) 1901; A.M. (Harvard) 1902.
Special Subject: English Economic History of the Sixteenth and Seventeenth Centuries.
Thesis Subject: “The English Patents of monopoly, 1550-1650.” (With Professor Gay).

 

 

Source: Harvard University Archives. Harvard University, Examinations for the Ph.D. (HUC 7000.70), Folder “Examinations for the Ph.D., 1904-1905”.

Image Source:   Harvard University. Quinquennial Catalogue of the Officers and Graduates, 1636-1920Cambridge, Massachusetts, 1920. Front cover.

Categories
Funny Business

On the second day of Christmas my colleague wrote with me…

a doggerel about 2-016:

“A Visit from St. Vlad” by Michael Burda and Irwin Collier.

 

Image SourceTrump Tower @ 5th Ave by Victor Harota posted on Flickr: .

Categories
Exam Questions M.I.T.

M.I.T. General Exams in Macroeconomics, 1959-71

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The original plan of Economics in the Rear-View Mirror was to provide a single artifact for each post. Larger (composite) data sets are given dedicated pages (e.g. Harvard Ph.D.’s in economics 1875-1926; Chicago Ph.D.’s in economics 1894-1926Economics Rare Book Reading Room). Sometimes I come along a group of artifacts that are best kept together so I end up with a post like today’s that prints out as more than 25 pages of text. 

Today’s treasure is a fairly complete run of MIT general examination questions in macroeconomics for the period 1959-1971 found in a folder in the Evsey Domar papers at the Economists’ Papers Archive at Duke University. For a few of the exams we even have handwritten records indicating the questions chosen by the examinees and the grades awarded (I have omitted the names).

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May 22, 1959
General Examination in Macroeconomics

Answer four questions, including at least one from each group.

I.

  1. (a) Explain the basic economic philosophy which forms the foundation of modern national income (and gross product) estimates in Western countries.
    (b) Show how this philosophy is transformed into specific criteria used by the U.S. Department of Commerce in their estimates of Gross National Product, National Income, and Consumer Disposable Income. Be as specific as you can.
  2. Present a careful analysis of the problem of “Price Flexibility and Employment” and trace its discussion (that is, of its principal points) through economic literature beginning with Keynes’ General Theory.
    What practical conclusions follow from this discussion?
  3. It was repeatedly said in 1946 that “Increased production is the best cure against inflation.” Comment on this statement as completely as you can. (Hint: Consider the dual aspect of the production process.) In the light of your finding, do you think a labor strike to be deflationary or inflationary?

II.

  1. Construct a “flexible” multiplier-accelerator model in which the government plays an active role. That is, it levies a proportional income tax and engages in stabilizing expenditures.
    1. Imagine first that the tax on last year’s income is collected this year, while consumers recon their disposable income on a cash basis (i.e. income earned minus taxes actually paid). Government expenditures are constant. How do changes in the tax rate affect the behavior of the model?
    2. If the tax system should go on a withholding basis, so that the tax on this year’s income is collected this year, how does that affect the stability and other characteristics?
    3. Taking taxes as in (b), suppose government expenditures are proportioned to the gap between full employment income and last year’s income. Is this stabilizing?
    4. Suppose government outlays are a decreasing linear function of the observed rate of change of income. Is this stabilizing?
  2. It is often said that the cause of any depression is the previous boom and its “excesses.” Does this make sense in terms of modern business cycle theory?

III.

  1. “The purpose of taxation is never to raise money but to leave less in the hands of the taxpayer.” Comment fully and critically. Can you identify the author? (No great penalty if you cannot.)
  2. To the best of your ability, try to analyze the incidence of a corporate income tax. What empirical information would you need for this purpose? (Please be reasonable).
  3. “People are always willing to become wealthier. The problem of economic growth in advanced countries is: will the public be willing to add to its holdings of physical assets an amount equal to the unconsumed portion of full employment output?” Discuss fully including a description of the alternatives to holding physical assets, the efficacy of the price system, policy measures.

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February 8, 1960
GENERAL EXAMINATION IN ECONOMIC THEORY

For the old-style exam (microeconomics alone), answer the first question (one hour) and any three of the others in Part I (two hours). For the new-style exam, answer any three questions in Part I (two hours) and any three questions in Part II (two hours), but without including both 3 and 4. Use separate books for Parts I and II.

PART I

  1. In a purely competitive economy, the only goods are food (F) and clothing(C), and the only factors are labor (L) and land (T), both fixed in supply. Each household supplies either L or T, but not both. Both goods are produced at constant returns to scale with both L and T. Isoquants are normally curved for both products; and, at any given marginal rate of substitution, a higher ratio of T to L is implied for F than for C.
    1. Show how the economy’s transformation curve for F and C is derived. Could it be either concave or convex or linear, and why?
    2. If everyone in the economy always divides his income equally between F and C, show how this determines uniquely what goods are produced, how they are produced, and for whom.
    3. How is that general equilibrium modified if the government imposes a tax on F and distributes the entire proceeds equally among all of the labor-supplying households. (Assume for simplicity that the tax and subsidy involve no administrative costs.)
    4. Would there be better ways of achieving the same redistribution of income? Explain fully why or why not.
  2. The demand for a monopolist’s produce is given by p = 50 – .001q. Within the relevant range, his total cost as a function of his output is C = 40q – .0005q2.
    1. In the monopolist’s long-run equilibrium, what are his price, output, and profit?
    2. How are those magnitudes affected if demand now increases to p= 56 – .001q?
    3. In general, what factors determine whether a monopolist’s equilibrium price will rise or fall in response to an increase in demand? Explain how the actual result in the present example fits in with those general principles.
  3. Plant capacity for a certain product costs $6 per year per unit of output. Given a plant of any particular size, any output up to the capacity level can be produced at a variable cost of $12 per unit; and outputs in excess of capacity are impossible. Demand is given by p = 24 – .001q (where p is the price of the product in dollars per unit and q is the quantity of product demanded per year).
    1. What are the long-run-equilibrium prices, outputs, and profits under conditions of (i) monopoly and (ii) pure competition?
    2. How are those equilibrium magnitudes affected in both the short and long run if new technological knowledge suddenly makes it possible to produce the product with a new type of equipment at a capacity cost of $5 per year per unit of output and a variable cost of $9 per unit of output. (Assume that, in the short run, new capacity can be added but none of the pre-existing capacity wears out. In the long run, all of the old capacity does wear out.)
  4. Show how an individual’s labor-supply curve can be derived from his basic preferences for leisure and income, assuming that he also has a fixed income from other sources. Then show the comparative effects of three alternative taxes that might be imposed to extract the same revenue from this man: (a) a lump-sum or poll tax, (b) a proportional income tax, and (c) a progressive income tax.
  5. Summarize Ricardo’s theory of rent, and evaluate its correctness and realistic relevance. In what sense, if any, does rent not enter into cost? Explain carefully.

PART II

  1. Discuss the role played by population growth in modern theories of economic development and business cycles. Be specific.
  2. Write an essay on the subject of “The General Theory After Twenty-Five (almost) Years.” Include in it, among other things, your evaluation of the usefulness of the book from the point of view of: (a) an advanced capitalist economy like the U.S.; (b) an underdeveloped mixed economy like India; (c) a centrally directed socialist economy like the USSR.
  3. Present your favorite theory (traditional, eclectic or entirely original) of the business cycle. Explain the empirical tests which you would subject it to. Be specific.
  4. Present an explanation of the causes of the current inflation in this country. Indicate the empirical tests which your explanation would have to pass. Be specific.
  5. (a) Explain the reasons why the economic activities of the government create special problems in national income (or gross product) accounting. Analyze critically the treatment of these problems by the U.S. Department of Commerce.
    (b) “Existing methods of international comparisons of per capita national income have an upward bias in favor of advanced countries.” Comment. “Don’t forget to indicate what these methods are.)

 

Comprehensive Exam Grades in Macro Theory
MIT Feb. 1960

[Student]

Q1 Q2 Q3 Q4 Q5 Average Remarks
[1] 50 (F) 30 (F) 60(D) F+ Fail
[2] 60(C-) 20(F-) 60(C-) D ? [guess: “Directed information to who? , ≥4 fail”]
[3] 70 (C) 65 (C) 70 (C) C Fair –
[4] 70 (C) 70 (C) C Fair –

A: 90-100
B: 75-89
C: 60-74
D: 50-59
F: less than 50

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September 19, 1960
General Examination in MACROECONOMICS

Answer three questions; at least one from each part.

I.

  1. Discuss Savings as an economic problem.
  2. a. Write an essay on the subject of “The Problem of Intermediate Products in National Income and Product Accounting.” Be as comprehensive as you can.
    b. Compare briefly the treatment of intermediate products in the Input-Output and Flow-of-Funds systems.
  3. Write a comprehensive essay on the subject of “The Economic Significance of the Rate of Interest.”

II.

  1. Write on the capital-output ratio as a tool for economic analysis, including some comment on:
    1. The problem of defining, measuring and interpreting the concept.
    2. Known facts about the historical course of the ratio..
    3. The role the concept plays in theories of growth and fluctuations.
  2. What are the facts about the relative magnitude of cyclical fluctuations in the output of capital goods and consumer goods? What are the theoretical implications of the facts as you know them? Discuss in this light the mildness of post-war economic fluctuation in the U.S.
  3. Write an essay on the contribution to the theory of economic growth of one of the following: Wicksell, Schumpeter, Kaldor, Tobin.

 

Macroeconomics Grades
Sep. 1960

Part I Part II Aver.
Q1 Q2 Q3 Q1 Q2 Q3
[1] G- G- F+/G- G-
[2] G F+ F-/Fail
[3] G+ F+ G- G-
[4] G+ G/G+ G- G/G+
[5] G G+ G- G
[6] G G G G

 

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February 6, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Part II—Macroeconomics—Two Hours

Answer THREE questions, at least ONE from each Part. Use a separate examination book for each question.

Part I.

  1. Write a comprehensive essay on the subject of “International Comparisons of National Income and Product”.
  2. Discuss saving as an economic problem. Trace the treatment of saving in the relevant economic literature.
  3. Write a comprehensive essay on the subject of “The Economic Significance of the Rate of Interest”.

Part II.

  1. Assume that inventory behavior is governed in the following Metzlerian way:
    1. Desired inventory is proportional to expected sales.
    2. Planned inventory investment behaves according to the capital stock adjustment principle (“flexible acceleration”).
    3. Expected sales equal last period’s sales.
    4. Current sales are proportional to current income, with unexpected sales made from stock.
    5. Income is the sum of Sales, exogenous government and fixed investment expenditures, and inventory investment (including unplanned!).

Now suppose operations research succeeds in (i) reducing the desired inventory-sales ratio and (ii) increasing the speed of adjustment. What effects will this have on the cyclical behavior of the system?

  1. Discuss the role of (i) floors and ceilings and (ii) autonomous investment in theories of growth and fluctuation, and say something about the realism of each concept.
  2. Formulate a one-sector model of economic growth using the following assumptions:
    1. One commodity, usable either as consumer good or as capital good.
    2. Its output is given by a production function with the stock of the capital good and labor as inputs, under constant returns to scale. (Consider various degrees of substitutability.)
    3. Depreciation proportional to stock of capital.
    4. Supply of labor grows geometrically, and exogenously, and is inelastically supplied.
    5. Competitive profit-maximizing rules.
    6. All profits are saved, all wages consumed.

Within this model, discuss the properties of the full-employment growth path (i.e. the development of output capital, wages, etc., which will equate desired saving and investment at full employment).

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May 22, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two Hours

Answer THREE questions, at least ONE from each part. (Course XV students answer ONE question from each part only.) USE A SEPARATE EXAMINATION BOOK FOR EACH QUESTION.

Part I.

  1. Write a comprehensive essay on the subject of “The Measurement of Economic Growth”. Include in it the description of existing methods, their rationale (the most important part) and your suggestions for improvement.
  2. Write an essay on “The General Theory after Twenty-Five Years”.
  3. a. Explain the nature and the rationale of the definition of the concept of money in “Price Flexibility and Employment” problems.
    b. “If the ‘Balanced-Budget Multiplier’ is correct, isn’t Say’s Law also correct?” Comment fully.

Part II.

  1. “By making existing capital assets obsolete, technological progress is alleged to create new investment opportunities and thus raise the level of income and employment. But to the extent that such obsolescence was foreseen, the assets were depreciated over a shorter period and thus gave rise to larger gross savings. Therefore, expected technological progress fails to stimulate the economy.” Comment fully.
  2. Present your favorite (traditional, eclectic, or original) business cycle theory. Indicate the empirical tests to which it will be subjected.
  3. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity; price increases will thus be avoided.”
    Comment fully and critically; indicate and justify your wage and price policy.

 

General Exam Grades “MacroTheory” May 22, 1961

[Part] I [Part] II
[Student] Q1 Q2 Q3 Q4 Q5 Q6 Average
[1] G G-/F+ F+ G-
[2] G- G-/F+ F- F+
[3] F+ G- G G-
[4] E- G- E- G+
[5] G+ G- F G-
[6] E-/G+ G F G
[7] G+ G- F- G-
[8] E- E- G+ E-
[9] Failed F F-/Failed Fail+
[10] F+ G G- G-
[11] G G F- G-
[12] G- G-/F+ F- F+
[13] F+ G- G G-
[14] G+ G- G G
[15] Failed G G-/F+ F+
[16] F-/Failed Failed Failed
[17] G-/F+ F F+

 

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September 18, 1961
GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two Hours

Answer FOUR questions, TWO from each part. USE A SEPARATE EXAMINATION BOOK FOR EACH QUESTION.

Part I.

  1. State, explain and justify the treatment of government expenditures (Federal, state and local) in the computation of national product and its components. Why is government treated differently from other sectors? What is the logical foundation for such treatment?
  2. Compare and contrast the Keynesian and the so-called Classical systems.
  3. Contrast the investment criteria applicable to (a) an individual firm, (b) the U.S. government, (c) the government of an undeveloped country. Explain clearly your reasons for such differences, if any.
  4. Write an essay on “The History of the Consumption Function.” Indicate and evaluate the major contributions. How significant are they? Which one do you prefer and why?

Part II.

  1. Describe fully the “economic indicator” approach to economic forecasting. Evaluate its performance. Compare it with the use of projected models of GNP.
  2. Describe the long-term trends in (a) population, (b) output, (c) capital, (d) real wage rates, (e) interest, (f) relative shares, (g) capital-output and other important ratios. What constancies have people claimed to observe? What behavior is explicable by a simple neoclassical model? What points to technological change or to various non-neoclassical growth theories? Mention authors as well as theories.
  3. Summarize briefly the historical facts on business cycles or fluctuations here and abroad. What theories have been suggested? Besides naming names, give your own best way of cataloguing the different theories (e.g. non-linear, etc.).
  4. Give the basic facts on “growth” here and abroad, recently and in history. How could America increase its sustained growth rate? Be analytical and specific.

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February 5, 1962
GENERAL EXAMINATION IN ECONOMIC THEORY
Part II—Macroeconomics
TWO HOURS

Please answer THREE questions, at least ONE from each Part. Use a separate examination book for each question.

Part I.

  1. “Existing methods of national product computation exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of undeveloped countries.”
    Comment fully.
  2. Compare and contrast the economic effects (on growth and level of income, employment, income distribution, and on any other phenomena you consider important) of population growth and of the growth of the capital stock.
  3. a.Explain the basic assumptions and reasoning used in the “Price Flexibility and Employment” discussions. (If you can, identify the authors involved.)
    b. Explain the nature and definition of the concept of money used in the same discussions.
    c. “If the ‘Balanced-Budget Multiplier’ is correct, isn’t Say’s Law also correct?” Comment fully..

Part II.

  1. Analyze a one-sector growth model in which net output is produced by labor and capital by a smooth neoclassical constant-returns-to-scale aggregate production function experiencing no technical change. Net output is divided up into consumption and net capital formation (or investment). Consumption, according to Modigliani, is 100 per cent of income when the capital wealth-to-output ratio is, say, 3, being a fraction at lower ratios and exceeding unity at higher ratios.
    1. First, let labor supply be stationary. Starting with very low capital, describe the evolution of the system’s output, wage rate, interest rate, capital, and various ratios (Q, w, r, k, k/L, Q/L, Q/k, wL/rk, etc.)
    2. Do the same if labor will always grow at 2 per cent per year.
  2. Describe and contrast business cycle approaches of (a) The National Bureau of Economic Research, (b) Econometricians like Tinbergen and Klein, (c) other typical modern Evaluate with respect to policy, prediction, explanation and present-day relevance.
  3. How can President Kennedy increase “growth” in a world with problems of international payments, possible wage-price “creeps,” fiscal burdens for defense, and stubborn productivity and personal thrift patterns. Prescribe, diagnose, and compromise dilemmas if there are any.

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May, 1962
GENERAL EXAMINATION—MACROECONOMICS

 

Answer three questions, including at least one from each part.

PART I

  1. a. Write an essay on the subject of “The Problem of Intermediate Goods in National Income and Product Accounting”.
    b. Suppose you were asked to compute national income and product for an economy consisting of a Prince and a number of slaves, from the point of view of the Prince. Explain the modifications of the usual methods that this assignment will require. Do you think it will result in a larger or a smaller income?
  2. A critic of Keynes’ General Theory once said that “What is new in it is wrong, and what is right is old”.
    Comment fully.
  3. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others”.
    Comment fully.

PART II

  1. Is an economy which has been growing at full employment (and full utilization of capacity) helped or hindered in the maintenance of full employment (and utilization) by a more rapid rate of growth of the labor force?
  2. It is sometimes said that the widespread adoption of scientific inventory control, permitting lower inventory-sales ratios on the average, will have the effect of damping inventory fluctuations. Discuss this theoretically. Do the same for the advent of improved forecasting methods.
  3. Discuss the relation between the propensity to save and the rate at which potential output increases.

 

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September 17, 1962
GENERAL EXAMINATION IN ECONOMIC THEORY
Part B—Macroeconomics

TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write an essay on the role of microeconomics in the construction and the testing of macroeconomic theory.

Part II

  1. Discuss and evaluate the treatment of government in the U.S. National income Accounts. Give special emphasis to the problems involved in using the figures for intertemporal and international comparison of the role of government both as a user of resources and as a producer.
  2. Write an essay on the “history, nature and significance” of the consumption function. 

Part III

  1. Discuss the issues of concept, theory, inference, and measurement that are involved in estimating the relation between investment and the growth of potential output.
  2. What is your theory of inflation? How does it tie in with modern business cycle theory?

 

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GENERAL EXAMINATION IN MACROECONOMICS
February 4, 1963

ANSWER ONE QUESTION FROM EACH PART (THREE QUESTIONS IN ALL).

Part I.

  1. Suppose that in an economy in equilibrium a large number of enterprises operating as proprietorships and partnerships decide to incorporate.
    1. List the principal ways in which the national income accounts might be affected in the short run. (Make explicit any reasonable assumptions you may want to make about real changes in the flows of spending and income.)
    2. What fallacious conclusions might you draw as to structural changes in the economy from these changes in the accounts if you did not know their source?
  2. Explain the basic economic philosophy which forms the foundation of national income and product estimates in the United States. Indicate how this philosophy is applied by the Department of Commerce in its estimates of Gross National Product, National income, and Disposable Income. (Be specific.)

Part II.

  1. Discuss, making use of an explicit model of income-determination, the various ways in which prices and wage rates enter into the determination of national income. In particular, what are the issues of theory and fact which are relevant to the debate about “underemployment equilibrium”?
  2. Identify and discuss, briefly and concisely, the nub of the issues raised by each of the following (where appropriate use an explicit model)
    1. “The rate of interest bears no necessary relation to the quantity or value of the money in circulation. The permanent amount of the circulating medium, whether great or small, affects only prices; not the rate of interest.” (J. S. Mill)
    2. “If it is true that the marginal propensity to consume of wage earners is higher than of profit recipients, one way to cure a deflationary gap and unemployment is to raise the money wage rate.”
    3. “Increased production is the best cure against inflation.”
    4. “The cause of any depression is the previous boom and its “excesses”.”

Part III.

  1. Discuss the critical issues of fact, theory, and value that are involved in designing a fiscal-monetary policy for the United States for the mid-1960’s. Elaborate, in particular, the criteria in terms of which you (“as economist”) would evaluate any particular mix of instruments.

 

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General Examination in Macroeconomics
May 13, 1963

Answer three questions in all, including at least one from each part.

I.

  1. In the earlier postwar period it was often said that “Increased production is the best cure against inflation.” Comment on this statement. In the light of your comment, do you think a prolonged strike is inflationary or deflationary?
  2. a. Set up a reasonable aggregative model appropriate to a closed economy where the money wage rate is rigid ownwards (only downwards).
    b. Assuming that the initial equilibrium configuration yields “full employment” and that the money wage rate cannot fall below the initial equilibrium wage rate, trace the effects on the critical variables of

    (i) an increase in the nominal stock of money

    (ii) a decrease in the nominal stock of money

    (iii) an autonomous fall in the volume of investment

    c. In each case, how would your answers differ, especially as regards the possibility of “under-employment equilibrium”, if the money wage rate, as well as all other prices, were fully flexible?
    d. How would your answers differ if money wage rates were governed by two-way escalator clauses?

  3. Write an essay on the theoretical and empirical foundations of an eclectic macroeconomic theory of demand for investment.

II.

  1. In Kaldoria, the marginal (=average) propensities to save out of wages and out of non-wages are different. The latter exceeds the former by a considerable margin. Together wages and non-wages exhaust national income. Markets are such that when national income exceeds a certain value Y*, the share of profits in national income tends to rise, and when national income falls short of Y*, the share of profits tends to fall. Finally, all investment is exogenous.
    1. Show that Y* is a stable level of national income.
    2. Calculate the share of profits when national income is Y*.
    3. Can you think of any reasons why Y* should correspond to “full employment”?
    4. Discuss the factual validity of the theory. That is, does Kaldoria resemble any country you know well?
    5. Can you modify the theory to include a marginal propensity to invest out of profits?
  2. Suppose investment behavior is such that all investment opportunities which offer a rate of return greater than or equal to some fixed target rate R are instantly adopted. Labor and capital are the only factors of production and constant returns to scale prevail. (Use a Cobb-Douglas production function, if you like.) The labor force grows exogenously at a fixed annual rate g.
    1. What saving rate, relative to national product, will just maintain full employment equilibrium?
    2. How does that saving rate vary with g?
    3. What do you make of the common notion that a rapidly-increasing labor force makes it harder to maintain full employment?
  3. Describe the approximate timing of inventory investment during postwar American business cycles, and compare this with the results of some formal model of inventory fluctuations.

 

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September 16, 1963
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE QUESTIONS, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. a. Write an essay on the subject of “The Problem of Intermediate Goods in National Income and Product Accounting”.
    b. Suppose you were asked to compute national income and product for an economy consisting of a Prince and a number of slaves, from the point of view of the Prince. Explain the modifications of the usual methods that this assignment will require. Do you think it will result in a larger or a smaller income?
  2. A critic of Keynes’ General Theory once said that “What is new in it is wrong, and what is right is old”.
    Comment fully.
  3. a. Explain the nature and the rationale of the definition of money in “Price Flexibility and Employment” problems.
    b. “If the ‘Balanced-Budge Multiplier’ is correct, isn’t Say’s Law also correct?”
    Comment fully. Explain the nature of both propositions.

Part II.

  1. Discuss the role of (a) floors and ceilings and (b) autonomous investment in theories of growth and fluctuations.
    Indicate the empirical tests to which the propositions expounded by you can be subjected.
  2. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than labor productivity.”
    Comment fully and critically. Indicate and justify your wage and price policy to achieve economic growth and stability.
  3. Explain and compare the roles which the growth of population and the growth of capital (separately and together) play in modern growth and business cycle theory.

General Examination Grades in Macroeconomics September 1963

Questions
 Student 1 2 3 4 5 6 Total Grade
[1] 18 25 22 65 Fair
[2] 29 24 26 79 G
[3] 30 29 29 88 E-
[4] 22 20 23 65 Fair
[5] 29 24 25 78 G

 

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February, 1964
GENERAL EXAMINATION IN ECONOMIC THEORY
MACROECONOMICS—TWO HOURS
[Note: this exam recycled in February, 1968]

Answer THREE QUESTIONS, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write a comprehensive essay on the subject of “Comparisons of National Income and Product in Time and Space.” Indicate the biases which arise in such comparisons.
  2. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Indicate what definition of money used in your discussion.
  3. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.

Part II

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity.” Comment fully.
  2. “If Hansen is correct, the faster is the rate of growth of population, the lower will be the unemployment level in the U.S.” Discuss fully. Include natural growth of population and immigration. In what respect does the growth of population differ from that of the stock of capital?
  3. Write an essay on “Floors and Ceilings in Business Cycle Theory.” Indicate the specific theories and your methods of testing each.

 ________________________

 

February 8, 1965
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. Write an essay on the subject of “Keynes and Patinkin on the Relation between the Quantity of Money on the One Hand, and Interest Rate, Price Level and National Income on the other.”
  2. It is frequently said that existing methods of national income computations exaggerate the present-day American per capita income in comparison with that of less developed countries and in comparison with American income in the past. Comment fully and critically. Are there statistical methods which may impart an opposite bias?
  3. Compare and contrast the economic effects (on growth and level of income, employment, income distribution, and on any other economic phenomena you consider important) of population growth and of the growth of the capital stock.

Part II.

    1. According to the 1965 Economic Report of the President:
      1. “The general guide for wages is that the percentage increase in total employee compensation per man-hour be equal to the national trend rate of increase in output per man-hour.”
      2. “The general guide for prices calls for stable prices in industries enjoying the same productivity growth as the average for the economy; rising prices in industries with smaller than average productivity gains; and declining prices in industries with greater than average productivity gains.” (p. 108)
        1. What would this policy imply for:
          1. average unit labor costs
          2. average product prices
          3. income distribution
          4. labor allocation among industries and skills
        2. According to theories of inflation you find most persuasive, what aspects of the price-wage mechanism would be most likely to frustrate the Council guideposts that are outlined above?
      1. The U. S. economic recovery from 1961 to the present has been accompanied by less inventory investment, especially in manufacturing, than occurred in previous recoveries. Some pertinent data are presented below.

 

Manufacturing
(Monthly averages for year)
$ billions
Sales Inventories Ratio
1950 18.6 31.0 1.48
1951 21.7 39.3 1.66
1952 22.5 41.1 1.79
1953 24.8 43.9 1.76
1954 23.3 41.6 1.81
1955 26.4 45.0 1.62
1956 27.7 50.6 1.73
1957 28.7 51.8 1.80
1958 27.2 50.0 1.84
1959 30.2 52.7 1.70
1960 30.8 53.8 1.76
1961 30.9 55.1 1.74
1962 33.3 57.7 1.70
1963 34.7 60.1 1.69
1964 37.1 62.2 1.64

Source: 1965 Economic Report, p. 237.

 

It has been said that this development has

    1. substantially improved the ability of the economy to avoid a recession;
    2. made it more likely that if a recession does occur, that it will be milder than it would otherwise have been.
      1. Briefly evaluate the validity of this remark by reference to the data, distinguishing intended from unintended investment to the extent possible. What minimum additional information would be required in order to make a rigorous distinction between intended and unintended inventory investment?
      2. Discuss this observation critically in the context of a sensible model of cyclical fluctuations. Do so on the presumption that improved methods of inventory control have lowered the desired inventory-sales ratio.

REMARK: Part A will be given 1/3 weight. Part B will be given 2/3 weight.

      1. Consider several alternative growth models which include technical change, labor and capital. What effects would the following policy measures have on growth rates, output/head and consumption /head:
        1. A decrease in the rate of interest;
        2. An increase in the ratio of investment and savings to toal output;
        3. A decrease in the rate of population growth.

________________________

 

May 17, 1965
GENERAL EXAMINATION IN MACROECONOMICS
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I.

  1. (A) National product is defined as the sum of all final goods each multiplied by its price.
    (B) National income is defined as the sum of all net incomes of certain recipients.

Discuss the following questions:

i. What is a final good in (A)? What special problems arise from the presence of certain types of organizations?
ii. What is the rationale of multiplying each product by its price? What assumptions are implied in this procedure? Are they realistic?
iii. Whose net incomes are aggregated in (B)? What assumptions does this procedure imply? Are they realistic?
iv. Could you propose changes or improvements in the above procedures? What additional comments would you like to make?

  1. Explain the following concepts with a particular stress on the assumptions underlying them.
    1. The ordinary (Keynes’) multiplier
    2. The balanced-budget multiplier
    3. The acceleration principle

Indicate the virtues and defects of each concept and their use in economic analysis.

  1. Discuss saving as an economic problem. Trace the treatment of saving before Keynes, by Keynes and after Keynes. Evaluate the contribution of the several authors you mention critically.

Part II

  1. Consider a one-sector economy with:
    1. A conventional, constant-returns to scale, diminishing returns, technology
    2. A labor force growing at a constant geometric rate
    3. No technical progress
    4. A ratio of net saving to output which is a falling linear function of the wealth-output (i.e., capital-output) ratio

Trace out the evolution of such an economy under conditions of full employment and full utilization of capacity, starting from an arbitrary stock of capital; and show how its stead-state properties are determined.

  1. “The ‘built-in stabilizers’ cannot stabilize the economy at a full employment level but can dampen oscillations.”

Analyze this statement using the following model:

(1) Yt = Ct + It + Gt Income Definition
(2) Ct = α(Yt-1Tt-1) Consumption Function
(3) It = β(YtYt-1) Investment Equation
(4) Tt = λCt Tax Equation

Note: the tax equation is the stabilizer in this model. Assume government outlays Gt are constant through time.

  1. Some economists believe recent high unemployment levels in the United States are structural in nature, others that the main cause has been a fairly simple Keynesian demand deficiency.
    1. Explain the main elements of the “structuralist” position. (It will be assumed that you understand Keynesian National Income analysis.)
    2. Show how the correct interpretation of these (not mutually exclusive) causes affect the analysis of price level movements in the United States over the past decade, with reference to two or three of the main theories that have been applied.

________________________

 

September 13, 1965
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I.

  1. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Why is a special definition of money required here?
  2. “Existing methods of national product computations exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of underdeveloped countries.” Comment fully and critically.
  3. In the early postwar period it was often said that “Increased production is the best cure against inflation.” Comment fully on this statement. Assume that the increase in output is indeed possible, but indicate what kind of output you have in mind. What other information would you require? In the light of your comments, do you think that a prolonged strike is inflationary or deflationary?

PART II.

  1. According to the 1965 Economic Report of the President:
    1. “The general guide for wages is that the percentage increase in total employee compensation per man-hour be equal to the national trend rate of increase in output per man-hour.”
    2. “The general guide for prices calls for stable prices in industries enjoying the same productivity growth as the average for the economy; rising prices in industries with smaller than average productivity gains; and declining prices in industries with greater than average productivity gains.” (p. 108)
      1. Using relevant aspects of production theory, what would this policy imply for:
        1. Income distribution
        2. Labor allocation among industries and skills
      2. According to theories of inflation you find most persuasive, what aspects of the price-wage mechanism would be most likely to frustrate the Council guideposts that are outline above?

Your answers should consider departures from competitive behavior where pertinent.

  1. Describe the long term trends in (a) population, (b) output, (c) capital, (d) real wage rates, (e) interest, (f) relative shares, (g) capital-output and other important ratios. What constancies have people claimed to observe? What behavior is explicable by a simple neoclassical model? Which of these regularities seem to require the introduction of technological change or the abandonment of central neoclassical propositions? Mention authors as well as theories.
  2. Discuss the role of (a) floors and ceilings and (b) autonomous investment in theories of growth and fluctuations.

________________________

 

February 7, 1966
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Answer three questions, including at least one from each part.

PART I:

  1. Write a comprehensive essay on the subject of “The Distinction between Final and Intermediate Products in economics”.
    Include in your essay (but don’t limit yourself to) the following points:

    1. The basic philosophy
    2. Governmental receipts and expenditures
    3. Input-output systems
    4. Federal Reserve Index of Industrial Production
  1. Discuss the following aspects of the “Price Flexibility and Employment” problem:
    1. The basic statement as presented by Patinkin
    2. The role and definition of money
    3. The role of expectations
    4. Your conclusions
  2. Write a comprehensive essay on the subject of “The Economic Effects of a Redistribution of Income from the Upper to the Lower Income Groups”. Indicate the positions on the subject of several economists whose views are relevant to your essay.

PART II:

  1. Is an economy which has been growing at full employment (and full utilization of capacity) helped or hindered in the maintenance of full employment (and utilization) by a more rapid rate of growth of the labor force?
  2. “I take leave to doubt whether there has ever been a trade cycle, i.e. a self-perpetuating cyclical movement, as opposed to a series of fluctuations due to the propensity of a private enterprise economy to exaggerate its response, either way, to the changes of history as it meets them.” Discuss this remark of Joan Robinson’s.
  3. Consider a conventional one-sector neoclassical growth model (i.e. constant returns to scale and smoothly diminishing returns in labor and capital, full employment). There is no depreciation and the labor supply is growing exponentially. The ratio of investment to output is constant. There is “disembodied” purely labor-augmenting technological progress going on exponentially at the rate a/j where j is the elasticity of output with respect to labor input (not necessarily a Cobb-Douglas constant).

Analyze how the steady-state rate of growth depends on the value of the investment-output ratio.

________________________

 

May 13, 1966
GENERAL EXAMINATION IN MACROECONOMICS
Two Hours

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I

  1. Beginning at least with Adam Smith, there has been much ado in economic writings about productive and unproductive activities and about their proper treatment in national income and product accounts (and in their subdivisions).
    Write a comprehensive essay on this subject. Include in it, but do not limit yourself to, the following points:

    1. The principles and procedures followed by the U. S. Department of Commerce
    2. Alternative methods which might be followed and the reasons for them
    3. Special problems created by the presence of governmental activities
    4. The Marxist position on this subject
  2. Write an essay on the subject of “Economic Effects of an Increase in the Stock of Money.” Indicate the position taken by several important economists familiar to you.
  3. Explain the investment criteria which should be used by:
    1. A private American enterprise
    2. U. S. government
    3. A Planning Board of some under-developed country.

Emphasize the differences in criteria to be used and the reasons for the differences.

PART II

A short well-organized answer is best.

  1. Formalize the following assumptions into a model:
    1. Current consumption is proportional to last year’s national income;
    2. Current investment is proportional to last year’s profits;
    3. Current profits are an increasing linear function of current national income and the change in national income since last year;
    4. National income is the sum of consumption and investment.

Will the model generate cycles if disturbed, for plausible values of the parameters? (Assume that, other things equal, 40% of a year-to-year increase in national income flows into profits.)

Describe how the response of the model economy would be affected by the imposition of a proportional income tax (with consumption proportional to disposable income).

Same for a proportional profits tax, with investment proportional to after tax profits.

Compare the stabilization effects of the two, if the profits tax is levied so as to raise the same amount of revenue as the income tax at a constant level of national income.

  1. Following is the text of a letter from James Tobin.

“Following is the text of a letter from Joan Robinson:

‘Many thanks for sending me the offprint from Econometrica (Money and Growth). Your Keynesian long-period theory is very different from mine and Kaldor’s. I should say that a lower rate of interest will make the rate of profit higher. The rate of profit r = g/sp, i.e. is equal to the rate of growth divided by the proportion of profit saved. I should say that, within reason, and provided that an appropriate part of investment is in research and training, a higher rate of investment will generate a higher natural rate of growth, so that deepening need not occur.’

Does this make sense?”

Answer Professor Tobin’s question. (The “rate of interest” refers, say, to the rate on government bonds, the only asset apart from real capital. The “rate of profit” can be taken to be the marginal product of capital in a one-sector economy near a steady state.)

Compare the behavior of output per man or per man-hour in the short-run (i.e. in the course of economic fluctuations) and in the long run, for the economy as a whole. Comment on any analytical issues raised by the behavior.

________________________

February, 1968
GENERAL EXAMINATION IN ECONOMIC THEORY
MACROECONOMICS—TWO HOURS
[Note: recycled exam from February, 1964]

Answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

Part I

  1. Write a comprehensive essay on the subject of “Comparisons of National Income and Product in Time and Space.” Indicate the biases which arise in such comparisons.
  2. “The problem of price flexibility and employment is a silly game based on the inclusion of some debtor-creditor relationships and the exclusion of others.” Comment fully. Indicate what definition of money used in your discussion.
  3. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.

Part II

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than its labor productivity.” Comment fully.
  2. “If Hansen is correct, the faster is the rate of growth of population, the lower will be the unemployment level in the U.S.” Discuss fully. Include natural growth of population and immigration. In what respect does the growth of population differ from that of the stock of capital?
  3. Write an essay on “Floors and Ceilings in Business Cycle Theory.” Indicate the specific theories and your methods of testing each.

[handwritten note: “special exam… She received good-/fair+ with charity]

________________________

14.452
FINAL EXAMINATION
May 23, 1968

Please answer each question in a separate examination booklet. Indicate on the front page of each booklet whether you are seeking only a grade in 14.452 or a grade in the general examination in economic theory. Those who seek only a grade in 14.452 should answer two questions in part I and two questions in Part II. Those who are taking the general examination in economic theory should answer two questions in Part II and two in Part III.

Part I

  1. Construct a difference-equation model embodying the following assumptions:
    1. Consumption is a linear function of disposable income lagged one time-unit;
    2. Tax revenue is proportional to national product;
    3. Investment is the sum of a component proportional to the current change in consumption and a component proportional to national product lagged one tie-unit;
    4. Imports are proportional to national product lagged one time-unit;
    5. Government purchases are constant.

Write down formally the conditions for an oscillatory response of the model to disturbance. When are the oscillations damped? How do variations in the tax rate affect these conditions? Suppose part of government purchases were made negatively proportional to the last observed change in national product?

  1. Why is technical progress an important part of the usual model of economic growth? Could increasing returns to scale play the same role? What is the special role of purely labor-augmenting (i.e. Harrod-neutral) technical progress?
  2. Imagine a planned economy choosing among steady states in the one-sector model, without technical progress. The planner values both consumption per head and capital per head (as a measure of national strength, say) and his preferences can be expressed by a system of conventionally-shaped indifference curves in consumption per head and capital per head.

Use this indifference map and the requirements for a steady state to show how the optimal steady state is chosen. Prove that the optimal capital per head will exceed the “Golden-Rule” (maximal consumption per head) level. Show what happens to the optimal position if the rate of population growth increases. Discuss briefly the case of a one-time upward shift in the production function.

Part II

  1. In the generalized multiplier-accelerator model, the equation \frac{dK}{dt}=I\left( Y,K \right) means that “investment decisions are always carried out”, so that when

I\left( Y,K \right)\begin{matrix}  > \\  < \\  \end{matrix}S\left( Y \right)

“unintended consumption or saving” occurs. Replace the above equation with \frac{dK}{dt}=S\left( Y \right) and interpret and analyze the resulting model. Compare its behavior with the case analyzed in class.

  1. Suppose I = I(Y,K) and S = S(Y) are the schedules of desired investment and saving. In what sense is IS a measure of excess demand in the aggregate commodity market?

How is it that no specific supply variables (labor force, for example) appear in this measure? Under what circumstances is it natural to suppose that dY/dt responds to (IS)? (Y = real output, p = commodity price level). Under what circumstances is it natural to suppose that dp/dt responds to (IS)?

  1. Consider a one-sector non-monetary model of growth under the following assumptions:
    1. The production function in intensive form is q = Akb;
    2. The wage is equal to the marginal product of labor;
    3. Investment demand is such that the after-tax return on capital is always at a target level r*;
    4. There is a tax on profits at rate t and the government spends all its revenue on consumption;
    5. The savings rates from wages and after-tax profits are both equal to a constant s.

Find the tax rate that will permit a steady state at full employment. When will it be between zero and one? How does it change if s changes? Interpret.

  1. Consider a one-sector growth model, with two factors of production (capital and labor), constant returns to scale, and no technical progress. Suppose that the propensity to save out of profits and capital gains is equal to one, and the propensity to save out of wages and transfer payments (taxes = negative transfers) is zero.

Money, which is non-interest-bearing government debt, is the only alternative asset to capital. The desired money-capital ratio is of the form \frac{m}{k}=L\left( {f}'\left( k \right)+{{\left( {{\dot{p}}}/{p}\; \right)}^{e}} \right) where m is the real per capita stock of money, k is the capital-labor ratio, and  {{\left( {{\dot{p}}}/{p}\; \right)}^{e}}is the expected rate of inflation which is equal to the actual rate {{\dot{p}}}/{p}\; in the steady state.

Government purchases are zero and the budget deficit, which is equal to the excess of transfers over taxes, is financed by issuing money.

    1. Describe the steady-state characteristics of the model.
    2. Find the rate of inflation that maximizes steady-state consumption per head.
    3. Suppose that {{\left( {{\dot{p}}}/{p}\; \right)}_{o}} is the rate of inflation in (b) that maximizes steady state consumption per head. Would a higher rate of inflation lead to a higher or lower long-run capital-labor ratio?

Part III

  1. Write a comprehensive essay on the subject of “The Problem of Weights in National Income and Index-Number Construction”.
    Explain the criteria which are used, should be used (for what purpose?) and why.
  2. Discuss the economic effects of an increase in the stock of money. Include an evaluation of the positions of several (not less than two) prominent economists familiar to you. How would you test the correctness of their positions?
  3. Discuss the effects of inflation of the level of real investment.

________________________

 

GENERAL EXAMINATION IN ECONOMIC THEORY
Macroeconomics—Two hours
Sept. 1968

Answer THREE questions, at least ONE from each part. Use a separate examination book for each question.

PART I

  1. “Existing methods of national product computation exaggerate the rate of growth of real product over time in a given country, and overstate the ratio between the real product of highly developed and of underdeveloped countries.”
    Comment fully.
  2. Write a comprehensive essay on the subject of “The Interrelationships between Money, Prices and the Rate of Interest.” Include brief reviews of the relevant theories.
  3. Write an essay on the subject of “The Economic Effects of a Redistribution of Income from the Upper to the Lower Income Groups.”
    Include in your essay the evaluation of several current theories on the subject.
    Consider as many economic effects as you can.

PART II.

  1. “In order to prevent a cost-push inflation, wage rates in each firm or industry should not increase faster than the growth of its labor productivity.”
    Comment fully.
  2. Consider the effects of technological progress on employment of labor. Be as comprehensive as you can.
  3. What are the built-in stabilizers and how do they work? Can we rely on them to achieve price stability and full employment?
    Discuss the subject fully.

________________________

 

Spring, 1969
GENERAL EXAMINATION IN MACROECONOMICS
Three Hours

Please answer FOUR QUESTIONS distributed as follows:

Part I—without choice—1 hour
Part II—any two questions—40 minutes each
Part III—any one question—50 minutes

Use a separate examination book for each question.

PART I

The Federal Government wishes to stop the current inflation of the aggregate price level. What are the issues in choosing among various fiscal and monetary policies directed to this end? Try to use macroeconomic models (expressed algebraically, graphically or verbally) to illustrate the problems involved.

PART II

  1. Write an essay indicating what you think are the most important ideas about the determination of the rate of investment in economic theory and in economic practice. (Suppose the problem came up in the course of presenting the static Keynesian macroeconomic model of income determination.)
  2. In the two-asset neo-classical growth model à la Tobin or Sidrauski we have two basic equations:
    1. \dot{k}=sf\left( k \right)-nk-\left( 1-s \right)\left[ \dot{m}+nm+{{\pi }_{m}}m \right]{{p}_{m}}
    2. {{p}_{m}}m=L\left[ {{p}_{m}}m+k,{{\pi }_{m}},{f}'\left( k \right),f\left( k \right) \right]

Suppose we add the requirement that

    1. {{\dot{p}}_{m}}=\pi _{m}^{*}{{p}_{m}}, that is that the government always vary its deficit to produce a constant rate of deflation \pi _{m}^{*} (which would, of course, be an inflation if .) \pi _{m}^{*}<0

 

    1. Show that this model can be expressed by the two equations

1a) \dot{k}=\frac{sf\left( k \right)-nk-\left( 1-s \right)n\left( {{p}_{m}}m \right)}{\left[ 1+\left( 1-s \right)C \right]}

where C={\left[ {{L}_{1}}+{{L}_{3}}{f}''+{{L}_{4}}{f}' \right]}/{\left( 1-{{L}_{1}} \right)}\;>0

2a) {{p}_{m}}m=L\left( {{p}_{m}}m+k,{{w}_{m}},{f}'\left( k \right),f\left( k \right) \right)

Why are the pairs of k and (pmm) which make \dot{k}=0 the same regardless of \pi _{m}^{*}? HINT: When \dot{k}=0 what is the increase in the per capita real money supply? What determines the increase in the total real money supply?

    1. Show the dynamics of this system graphically by sketching the combinations of (pmm) and k that make \dot{k}=0 and those that satisfy 2a) (the aa schedule). What is the effect of a higher {{\pi }_{m}} on the stable steady-state stock of capital?
    2. Under what conditions can the government force the economy to the golden-rule capital stock by enforcing an appropriate \pi _{m}^{*} through fiscal policy without changing s (assume that pmm must always be positive for any \pi _{m}^{*})?
  1. Consider a vintage growth model with fixed factor proportions (clay-clay) a constant labor force (n=0), and Hicks neutral technical change at rate γ. Suppose the economy in question invests every year in a given fixed quantity of new machines (not a constant fraction of income), and has always followed this policy. Assume perfect competition, and full employment.
    1. Write down the production function for a given vintage. What rates labor and capital-augmenting technical change are implied?
    2. What is the labor requirement per machine of vintage τ?
    3. Find the economic life time of capital.
    4. Describe the growth paths of output, wages, quasi-rents and the labor share of income.
    5. Suppose the economy suddenly doubles its investment and then holds it constant. What will happen to wages and the life-time of capital as time passes?
  2. What growth model or growth model ideas would be helpful in studying the effects of a redistribution of income from businessmen to workers on investment and/or growth? You may develop a model explicitly or simply write an essay reviewing the important concepts and their relevance to the question.

PART III

  1. You are asked to compare the per capita national income of some underdeveloped country, such as Brazil, with that of the United States. Assume that the Brazilian currency (a) is convertible into dollars and (b) that it is not convertible.
    Discuss as thoroughly as you can the problems involved in this comparison and the methods used for dealing with them. Evaluate these methods critically and present and justify your own recommendations.
  2. Explain what is meant by “The Money Illusion” and what role does its presence and absence play in theories of employment, interest and prices. Be as comprehensive and as critical as you can.

 

General Examination Grades in Macroeconomics
Spring 1969

Spring 1969
90 = perfect
[1] 83 Ex+
[2] 79 Ex
[3] 78
[4] 77
[5] 75 Ex-
[6] 75
[7] 75
[8] 74 Ex-/G+
[9] 74
[10] 73 G+
[11] 72
[12] 72
[13] 71
[14] 71
[15] 71
[16] 70 G+/G
[17] 70
[18] 69 G
[19] 69
[20] 69
[21] 69
[22] 69
[23] 68
[24] 67
[25] 67
[26] 67
[27] 66
[28] 66
[29] 66
[30] 65 G/G-
[31] 65
[32] 64 G-
[33] 64
[34] 62
[35] 61
[36] 57 F+
[37] 56
[38] 53 F
[39] 50 ?
[40] 49
[41] 48

________________________

MACRO GENERAL
February 3, 1971

DO THREE QUESTIONS, AT LEAST ONE FROM A AND ONE FROM B. 40 Minutes each

A

  1. There has been a long-standing dispute among economists whether money is or is not neutral. Explain what this dispute is about, what the major positions are, and present and justify your own position on the subject.
  2. In order to stimulate investment expenditures by business, President Nixon has suggested a more accelerated treatment of depreciation for income tax purposes. For simplicity assume that every depreciable capital asset can be written off for tax purposes in half the usual time. Analyze the proposal and state and justify your conclusions.
  3. The Bergson Index may be defined as the ratio of Soviet output (industrial production or GNP or a similar measure) to Soviet inputs (labor and capital) divided by a similar ratio for the U.S., first in Soviet and then in American prices for some given year. On finding that this Index is less than one, Bergson has concluded that the Soviet economy is less efficient than the American.
    1. Which comparison (that is, in Soviet or in American prices) is more likely to be more favorable for the USSR? Why? (This is the less important part).
    2. Evaluate critically Bergson’s conclusions. (This is the more important part).

B

  1. Use a simple macroeconomic model that describes the interaction of the real and financial sectors to describe a theory of determination of the price level. Is simultaneous unemployment and inflation consistent with this theory? What parts of the theory would you modify to take account of simultaneous unemployment and inflation?
  2. Define the “golden rule” growth path and derive conditions for an economy to be on it. Compare some actual economy’s performance to the golden rule and, if you can, estimate the saving necessary to reach it. Would you favor such a policy?
  3. Consumer spending in the U.S. is currently in a slump. What hypotheses can you advance to explain this fact?

 

________________________

 

GENERAL EXAMINATION IN MACROECONOMICS
June 24, 1971
TWO HOURS

Please answer THREE questions, at least ONE from each part. Use a separate examination book for each question. Write your CODE NUMBER on your book but not your name.

PART I

  1. In a recent speech, Simon Kuznets suggested the following method for expressing the relative rate of growth of real national income of a country: calculate the relative rate of growth of real income of each person (or family) and then take the unweighted arithmetic mean of these rates. Let us call the resulting rate
    1. Compare the rationale behind Kuznets’ suggestion with that of the conventional computation of the rate of growth.
    2. For what purposes would you use each method? Why?
    3. Suggest other ways for achieving Kuznets’ objective.
    4. How would the magnitude of K compare with that of the conventional rate?

(Note: do not worry about the distinction between national income and gross product.)

  1. Write an essay on the subject of “Economic Effects of the Retardation of Population Growth in the U.S.” (You may choose a comprehensive approach or concentrate on some issues you regard particularly important and interesting.
  2. Analyze the effects on aggregate demand and supply, both in the short and in the long run, of a prolonged strike in some important industry. Consider several relevant cases.

PART II

  1. When the current Republican administration came into office it faced substantial and rising rates of inflation, and inherited from the last Democratic administration a moderately restrictive fiscal policy. Write a memo to the President outlining his macroeconomic policy options with pros and cons for each. (Would you list different options if you were Paul Samuelson rather than Milton Friedman?)
  2. Use some complete macroeconomic model to discuss the ways monetary policy influences aggregate demand. Try to judge which mechanisms are likely to be strong and reliable, which weak and uncertain.
  3. Capitalia is a two-class society in which land is not a constraint, workers save and capitalists invest. Its population growth rate is 1%. Nothing has ever happened in Capitalia except exponential growth.
    1. What is the rate of return to capital?
    2. Does the production function make any difference to your answer in part a)? Explain.
    3. If the production function is Cobb-Douglas with capital exponent .2, find the capital per head, output per head, and consumption per head.
    4. In an unexpected development, population growth doubles. What begins to happen to the rate of return, per capita saving, and the saving as a fraction of output?
    5. The government decides to maintain earlier levels of per capita saving “to avoid the impoverishment of our nation” by taxing workers. Comment on this policy. What will per capita consumption be under this policy?

________________________

Source: Duke University. Rubenstein Library. Evsey Domar Papers, Box 16, Folder “Ph.D. Economic Examinations. Macroeconomics.”

Image Source:From the Flying Car to the Giant R2-D2: The Greates MIT Hacks of All-Time“, by Robert McMillan. Wired, March 20, 2013.

“Boston’s Harvard Bridge is 364.4 Smoots long. And the fact that anybody would remember this in 2013 was probably the furthest thing from MIT freshman Oliver Smoot’s mind on the October 1958 night that he lay himself down, time and again, along the bridge, allowing his fraternity brothers to measure its length (each Smoot is about 5 feet, 7 inches). It was a fraternity prank, but the next year the bridge’s Smoot markers were repainted. Thus, an MIT landmark — and a unique unit of measurement — was born.

Smoot himself went on to become a board member of the American National Standards Institute — a standards man through and through.”

 

Categories
Chicago Courses Syllabus

Chicago. Graduate Price Theory. Economics 300A. Harberger, 1955

_______________________

Thus far Economics in the Rear-View Mirror has been able to provide syllabi for the following four professors who had taught the first core price theory course at the University of Chicago spanning nearly a quarter of a decade during the middle third of the 20th century:

Today I add the syllabus for Arnold Harberger (a.k.a.”Triangle Man”, see the photo credit below). Note: chapters from Samuelson’s Foundations are only recommended readings, not yet required.

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Economics 300A
Mr. Harberger
Autumn 1955

 

Texts:

  1. Alfred Marshall, Principles of Economics, 8th
  2. George Stigler, Theory of Price, revised ed.
  3. H. Knight, The Economic Organization

 

Supplementary material (Purchase not required):

  1. American Economic Association, Readings in Price Theory
  2. Milton Friedman, Essays in Positive Economics
  3. Milton Friedman, Notes on Lectures in Price Theory (mimeographed)

Students are expected to be familiar with the materials in Stigler’s Theory of Price before entering the course. Readings marked with an asterisk (*) are recommended, not required.

 

Reading List

 

  1. Introduction:

Knight, The Economic Organization, pp. 1-37
Stigler, Theory of Price, Chs. 1-3
Friedman, “The Methodology of Positive Economics” in Essays in Positive Economics

  1. Demand:

Stigler, Theory of Price, Chs. 4-5
Marshall, Book III, Chs. 2-4, Book V, Chs. 1-2
Knight, Risk, Uncertainty and Profit, Ch. 3
Hicks, Value and Capital, pp. 11-52
Working, “What do Statistical Demand Curves Show?” Quarterly Journal of Economics
*Samuelson, Foundations of Economic Analysis, Ch. 5

  1. Supply:

Stigler, Theory of Price, Chs. 6-8
Marshall, Book V, Chs. 3-5, 12, Appendix H
Robinson, Joan, Economics of Imperfect Competition, Ch. 2
Clark, J.M., Economics of Overhead Costs, Ch. 9
Viner, “Cost Curves and Supply Curves”, Zeitschrift fuer Nationaloekonomie, Book III (Sept 1931) pp. 23-46, reprinted in Readings in Price Theory, pp. 198-232
*Samuelson, Foundations of Economic Analysis, Ch. 4

  1. Market Organization:

Stigler, Theory of Price, Chs. 9-13
Stigler, “Monopolistic Competition in Retrospect” in Five Lectures on Economic Problems
Harrod, “Doctrines of Imperfect Competition”, Quarterly Journal of Economics, May 1934, pp. 442-461
Chamberlin, The Theory of Monopolistic Competition, Chs. 3, 5
*Robinson, E.A.G., The Structure of Competitive Industry
*Robinson, E.A.G., Monopoly.

  1. Utility and Welfare Economics:

Alchian, “The Meaning of Utility Measurement”, American Economic Review, March 1953, pp. 26-50
Friedman and Savage, “The Utility Analysis of Choices Involving Risk”, Journal of Political Economy, August 1948, pp. 279-304. Reprinted in Readings in Price Theory, pp. 57-96
Scitovsky, “The State of Welfare Economics”, American Economic Review, June 1951, pp. 303-315
Hicks, “The Four Consumers’ Surpluses”, Review of Economic Studies, XI (1943-44), pp. 31-40
*Hotelling, “The General Welfare in Relation to Problems of Taxation and of Railway and Utility Rates,” Econometrica (VI) (1938), pp. 242-269
*Samuelson, Foundations of Economic Analysis, Chs. 5-7

 

Source: Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder “77.1 University of Chicago Econ 300 A & B”.

Image Source: “[Arnold] Harberger strips down to reveal himself as “Triangleman” at the University of Chicago Economics Christmas Party, probably December 1970”. Robert J. Gordon’s website.

Categories
Chicago Funny Business

Chicago. Two Christmas Songs, “Economized” Lyrics. Undated.

Copies of the following bastardized Christmas Carols from the University of Chicago Department of Economics can be found in Milton Friedman’s papers at the Hoover Institution Archives. They are filed with other skit party materials in a folder marked “University of Chicago, Miscellaneous”.

These texts are undated, one might say timeless.

From the same collection: a HMS Pinafore parody; “Ode to an Economist”).

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THE TWELVE WEEKS OF CLASSES
(tune: “The Twelve Days of Christmas”)

On the first week of class my Professor said to me:

                                    We must maintain consumer sovereignty!

Second week:             Uncertainty is no answer, and
Third week:               Impute costs,
Fourth week:             Lunch is never free,
Fifth week:                 Free Enterprise!!!
Sixth week:                Marshall is our hero;
Seventh week:           M V equals P T;
Eight week:                Manna comes each Monday;
Ninth week:               Inflation is an evil;
Tenth week:               This week do the readings;
Eleventh week:          Answer true or false please;
Twelfth week:            SORRY, BUT I FLUNKED YOU!

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SONG FOR AN ENTREPRENEUR
(To the tune of Jingle Bells)

 

Maximize, maximize, that’s the crucial key.
Allocate resources by their productivity.
Equalize VMP’s with their prices, and
Your production function is the finest in the land.

 

Source: Hoover Institution Archives. Milton Friedman papers. Box 79, Folder “79.6 University of Chicago, Miscellaneous.”

Image Source: From a 1939 Nativity Play in Rockefeller Chapel in 1939. University of Chicago Photographic Archive, apf4-03011. Special Collections Research Center, University of Chicago Library.

 

Categories
Chicago Courses Curriculum Economic History

Chicago. Proposal for interdisciplinary MA courses on Capitalism and Democracy. Hoselitz, 1947

With the election of Donald J. Trump to the U.S. Presidency, it is perhaps time well-spent to yet again reflect upon the relation between capitalism and democracy. Today I post a 1947 proposal for the creation of a complementary pair of interdisciplinary seminars on problems of capitalism and democracy to be taught in the University of Chicago’s Divisional Social Science M.A. program. The proposal was written by a 34 year old Austrian, Berthold Franz Hoselitz ( the future founding editor of the journal Economic Development and Cultural Change), and presumably circulated among the respective departments of the Division of Social Science for approval. The copy transcribed here comes from Milton Friedman’s papers at the Hoover Institution together with the agenda for the faculty meeting when the proposal was scheduled to be discussed. We see from the course announcements that the proposal was accepted.

The poor image of Hoselitz from 1940 is partially compensated for by the fact that it is (up to now) the only image I have been able to find of him at all.

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Fun Fact: Hoselitz taught John Nash

Q. …Did you have any teacher through your period at university which was particularly a role model to you?…

John Nash: I certainly had some good teachers who were very helpful to me and influential. For example, in economics I only took one economics course and I was an undergraduate study in Pittsburgh at what is now called Carnegie Mellon, but by coincidence the person who taught the course, it was a course in international economics, and by coincidence this was someone who came from Austria. So there’s actually to consider Austrian economics is like a different school than typical American or British. So I was by coincidence influenced by an Austrian economist [Bert F. Hoselitz, Associate Professor of Economics appointed October 1, 1947, resigned September 1948, Carnegie Institute of Technology.] which may have been a very good influence.

Source: Interview with Dr. John Nash at the 1st Meeting of Laureates in Economic Sciences in Lindau, Germany, September 1-4, 2004.    Interviewer: Marika Griehsel.

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Biographical Note

Bert F. Hoselitz was born Berthold Frank Hoselitz in Vienna, Austria in 1913. He received his doctor of law degree in 1936 from the University of Vienna. He left Austria in 1938, traveling first to England, then to the U.S., where he taught briefly at Manchester College in North Manchester, Indiana. He enrolled in the University of Chicago , receiving an M.A. in Economics in 1945. Hoselitz joined faculty at Chicago as an instructor in 1945, and became emeritus in 1978.

Hoselitz advocated interdisciplinary scholarship and his work pushed the common wisdom within economics at the time by considering the role of cultural and sociological factors on economic development. In pursing this line of inquiry, he developed professional relationships with scholars around the globe, though particularly in Asia, and participated in both a research and advisory capacity for a broad spectrum of academic research projects that spanned traditionally distinct social science disciplines. In 1962, Hoselitz supervised a pair of National Science Foundation sponsored studies examining the social and economic entailments of developments in science and technology within Asia, primarily India. At a broader level, he was also active in efforts to bring diverse social science disciplines into conversation with one another. In 1958 began participating in an editorial and authorial capacity for the International Encyclopedia of the Social Sciences.

Hoselitz’s scholarly activities were not confined to academic research and teaching. He was also active and engaged in policy discussions concerning development and the developing world. In the early phase of his career Hoselitz participated in an array of applied research projects, advising work and professional associations related to economic development and development policy more broadly. For example, he wrote for the United Nations on issues related to economic development, beginning with a 1952 technical-assistance mission to El Salvador, and in the late fifties he served on a team of advisors to the government of India concerning the plan for the national capital region.

In addition to his global professional engagements, Hoselitz also remained an active participant and organizer in the scholarly community of his home institution at Chicago. In 1952 Hoselitz founded the Research Center in Economic Development and Cultural Change at Chicago as well as the affiliated interdisciplinary journal Economic Development and Cultural Change, published through the University of Chicago Press. Hoselitz served as editor from the journal’s inception until 1985. He also served on the committee of the Norman Wait Harris Memorial Foundation based at the University of Chicago which focuses on issues of international interest and works to facilitate the exchange of knowledge about the diverse peoples of the world. In this capacity, Hoselitz organized visits by lecturers, funded conferences and facilitated the foundation’s publishing efforts.

Considered an interdisciplinary pioneer and an expert on the social and cultural dimensions of economic development, Professor Emeritus Bert Hoselitz died in Chicago on February 14, 1995.

 

Source: University of Chicago Library. Guide to the Bert F. Hoselitz papers, 1923-1987.

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DEPARTMENT OF ECONOMICS

A G E N D A
Tuesday, June 3, 1947, at 1. p.m. in Room SS 424

 

  1. Students’ Business:
    1. Tom, Chiu-Faat Joseph: Petition to take Chinese as second language.
    2. Berkman, Herman G.: Petition to take Planning as major field of specialization; to take intensive examination in French only.
    3. Murphy, J. Carter: Petition to substitute Mathematics for second language.
    4. Schwitzer, Selma: Petition for Mathematics to be one of secondary fields of specialization for A.M. (alternative). Other fields statistics and theory.
    5. Weil, R.A.: Petition to waive residence requirement.
      Recommendation to Candidacy. Tentative approval of thesis topic: “Federal Aid to Achieve State-Local Co-operation in a Counter-Cyclical Fiscal Policy.”
  2. Weil, R.A.: Petition to waive residence requirement.
    Recommendation to Candidacy.
    Tentative approval of thesis topic: “Federal Aid to Achieve State-Local Co-operation in a Counter-Cyclical Fiscal Policy.”
  3. Seminar, course and staff for “Problems of Capitalism and Democracy”
  4. Plans for counseling students during summer and next fall.
  5. New business.

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OUTLINE FOR A PROGRAM ON THE “PROBLEM OF CAPITALISM AND DEMOCRACY”

I. Background

Some two years ago the History Department of the University of Chicago discussed the possibility of instituting in their Department so-called “problem-courses”. Instead of subdividing the subject matter of history on the basis of time periods and countries or regions, they felt that major problems, notably those of capitalism and democracy, should be studied in their historical perspective. These plans were thought over for some time but were not put into effect during the war, chiefly because of lack of suitable personnel who could be charged with the preparation and execution of these courses.

When, a few months ago, the Divisional Masters Committee met, and when it was decided that the Divisional Master’s program should provide for a more generalized program than that provided by departmental courses, the suggestion was made that the courses on the history of capitalism and the history of democracy might be worked out in a manner in which not only the historical sweep of the two institutions would be under consideration, but where also the problems arising in the two areas would be studied. The courses were thus conceived by the Divisional Masters Committee as comprising an analysis of historical background as well as the “nature” and problems of capitalism and of democracy.

When these courses were discussed it was the feeling of some members of the Divisional Masters Committee that what was needed to be stressed more and made more explicit than could be done by giving two apparently unrelated courses in isolation, was the problem of the interrelations of capitalism and democracy, or (in different words) the relationship of economic organization and the realization of political values of liberty, equality, and justice. This dilemma was met by the Masters committee by declaring the courses to be long into one “field” of study and by suggesting that the students be asked to take the courses simultaneously, by providing for parallel planning and teaching of the courses, as much as possible, and by providing an examination over the two courses (the field) in which the interrelations between economic organization and political values was stressed.

This plan was submitted to the Executive Committee of the Division of the Social Sciences and accepted as part of a program for the Divisional Masters Degree. At a later meeting between representatives of the Divisional Masters Committee and members of the Department of Economics, Political Science, and History, the problem was discussed again, and reasons for combination of the two courses, as well as reasons against brought forward. In addition the proposal was made and accepted that a faculty seminar be established which concern itself with the whole problem raised by the relationship of economic and political organization, notably the interrelations of capitalist, free enterprise, economic organization and political democracy.

 

II. Some Thoughts on a Program for Studying the Problem of Capitalism and Democracy.

A seminar or a combined course on the problems of capitalism and democracy seem to me to involve two sub-problems which ought to be separated from each other. One is the examination of the relationship of given economic institutions in the particular political framework and the processes which would be set in motion both in the political and economic field by attempts to realize certain aims of human welfare, or other chiefly political values, such as justice, freedom, etc.

The other problem would involve a study of actual processes of the interaction of political and economic institutions, their mutual interrelations in the past under different conditions in their dependence upon it given set of values in the particular hierarchies in which these values were accepted in certain countries and at certain times.

Both approaches may be dynamic but the first would primarily be analytical in that it would study the probable consequences of economic and political policies upon each other and therefore would in part deal with the study of how the existing institutions would be shaped by policies designed to meet social objectives in a more adequate way then is being done at present. In this analysis existing institutions such as constitutional arrangements, legal rules, the whole economic structure and possibly the international power structure as they affect the various countries, would be the starting point of the examination. This analysis would deal with problems which are of the utmost importance in the light of the discussion going on currently. It would have to take up those problems which presently are generally assumed under the heading of the relationship of freedom and planning. I think that it might be well for the Department to arrange the questions of a general and wide character affecting the whole social structure be included as well as more limited problems dealing with very specific economic or political policies in particular fields and their repercussions on the whole social structure.

The historical part could be used, it appears to me, for the following purposes.

(1) It could throw light on the coexistence of particular economic and political institutions especially on the historical coexistence of capitalism and democracy.

(2) It could provide evidence to show how and to what extent changes which either of the two institutions undergo undergoes in industrial civilization, have affected the other, and therefore could provide a basis for making certain analogies which present policies actually in operation or proposed.

(3) It would have to be supplemented by an analysis of the influence of the institutions of industrial capitalism and democratic political organization upon the formation of human personality, and vice versa the influence of human motivations and psychological factors upon the social, economic and political organization of the time.

(4) I am not certain whether an analysis of the origins of capitalism would be fruitful in this connection, but I think that it would be useful in the historical part to provide for a comparison between the social structure of the 19th century in the economic organization which it manifested in political values which it claimed to realize, and other societies, their economic and technological equipment and their political organization. If this can be supplemented by a comparison of the “basic personalities” in the two cultures, this might throw additional light on the question whether industrial capitalism and political democracy are bound up with each other, whether the ties exist in the social field exclusively, what ties are provided by the personality structure of the individuals composing the society and what evidence is provided by the historical incidence of attempts simultaneously to realize certain economic and political aims.

It seems to me, therefore, a defect that in the original planning of the program social psychologists and social anthropologists did not participate and I would think that both of these have important contributions to make.

Although it would be difficult clearly to separate the analytical approach which is concerned with examination of concrete presently existing problems confronting us in America and European countries as well as some of the “backward” countries, from the historical problems, I don’t think that such a separation would be necessary as long as it is logically plain that in the one area we are dealing with the application of generalizations drawn from history and other social sciences on practical policies, whereas in the other field we deal with an attempt to give a comprehensive examination of why particular processes occur, when and where they occurred and what factors were responsible for their occurrence. In other words, the two approaches would complement each other and would give opportunity to representatives of all the social science disciplines to make a contribution.

We frequently talk about the problem of modern society and I think we mean primarily by this the set of problems outlined above. Although as individuals we feel inclined that we must provide answers of what will be the probable effects of concrete policies, all of us attempt to build those answers into a logical framework which comprises the totality of social arrangements in which, therefore, is colored by our conception of political and cultural processes as well as economic ones. Any clarification of the relationships of these processes in present-day society which can be deduced by analytical study or by an examination of historical periods from which analogies for present-day action can be provided might therefore give at least a partial answer. I would like to see both the seminar and a course or combination of courses be carried on on the basis of these thoughts. If a more complete outline is desirable I shall gladly provide one.

Respectfully submitted
Bert Hoselitz

May 22, 1947

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

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DIVISIONAL COURSES

[…]

Social Science 300A,B,C. The Nature and Problems of Capitalism. A study of the economic institutions of capitalist society in the more critical phases of their development up to the present, with particular emphasis on the social and political context in which economic change occurs. Closely correlated with Social Science 301A, B,C, which is taken concurrently. Enrolment limited to students under the Divisional Master’s Program. Aut, Win, Spr: MWF 10:30; Staff.

Social Science 301A,B,C. The Nature and Problems of Democracy (identical with Political Science 300A,B,C). Examination of the political institutions of Western society, especially in their relation to the development of democratic ideals and practices. Major concern is with American institutions as they operate in the context of both democratic ideals and political reality. Taken concurrently with Social Science 300 A, B, C. Enrolment limited to students under the Divisional Master’s Program. Aut, Win, Spr: MWF 10:30; Staff.

 

Source: University of Chicago, Announcements Vol. XLIX, No. 9 (July 1, 1949). The Division of the Social Sciences, Sessions of 1949-1950. p. 10.

Image Source: Declaration of Intention to apply for U.S. citizenship by Bertold Franz Hoselitz (alias Hazlitt), August 8, 1940.