Categories
Chicago Economists Yale

Chicago. Meet Ph.D. alumnus, Charles E. Lindblom, 1945

Charles Edward Lindblom (1917-2018!) was a Chicago economics Ph.D. (1945) who ultimately climbed as far up the Yale ranks as you could get – a Sterling Professorship of Political Science and Economics. He was working on his 1977 book Politics and Markets when I took a course with him in the Spring semester of 1973. His lectures have left no real mark on me, but I recall my impression of watching a thinker in real time who would dare to attempt to think things through while lecturing. I guess it should come as no surprise that someone who attained fame through an article with the title “The Science of ‘Muddling Through’” (1959), talked the talk the way he perceived policymakers to walk the walk (incrementally).

In a different course (Democracy and its Critics) I experienced his long-time colleague and collaborator Robert Dahl as the opposite model of an equally content-rich but silky smooth lecture style. I am glad to have sat at the feet of both when I was still of an impressionable age.

_____________________

From: The Yale Banner of 1960

Associate Professor of Economics CHARLES E. LINDBLOM came to Yale in 1946, after receiving his B.A. at Stanford and his Ph.D. at the University of Chicago. Mr Lindblom has always had an interest in the fields where economics and political science converge, and thus he is active in both areas. In 1951 he held a Guggenheim Fellowship and later he was a fellow at the Center for Advance Studies in the Behavorial Sciences. Mr. Lindblom also assisted former Connecticut Governor Bowles [Fun fact: Gov. Chester Bowles was economist Sam Bowles‘ father.] on the problems of housing and compensation legislation. At present, Professor Lindblom is on a committee on Latin American economics for the Twentieth Century Fund, a consultant for the RAND Corporation, and a consultant to a United States Senate subcommittee. On the Yale scene, he is an advisor to the Political Union and has written Politics, Economics and Welfare with Mr. [Robert] Dahl and Unions and Capitalism; he is working on several books now. What time he can salvage from this busy schedule is devoted to woodworking and sculpting. Next year he will be a Ford Faculty Fellow in economics.

Source: The Yale Banner 1960, p. 39.

Categories
Chicago Economist Market Economists Gender

Chicago. Notes on conversation with U Chicago president Colwell by T.W. Schultz, 1946

Biblical Greek Scholar/Theologian Ernest Cadman Colwell served under Chancellor Robert M. Hutchins as the president of the University of Chicago from 1945 to 1951. Theodore W. Schultz was the relatively new head of the Department of Economics who met with Colwell in late September 1946 to brief the president on developments in the economics department, especially with respect to efforts being made in pursuit of several economists needed to fill the gaps left by Henry Simons’ death (1946), Chester W. Wright’s retirement (1944), resignations by Jacob Viner (1946) and Simeon E. Leland (1946), and Oskar Lange’s leave of absence (1945-).

We see in the memorandum of conversation transcribed below that John and Ursula Hicks posed a spousal hire issue needing a creative solution before an actual offer could be made and that sixty year old Frank Knight was due some sort of a “senatorial courtesy” to get him on board with the majority of the department who badly wanted to extend an offer to thirty-one year old Paul Samuelson. 

_________________________

Chicago Economics in 1946

Mitch, David. “A Year of Transition: Faculty Recruiting at Chicago in 1946.” Journal of Political Economy 124, no. 6 (2016): 1714–34. https://www.jstor.org/stable/26549915. Especially the online supplemental materials, where the following memo is quoted in part.

_________________________

More on the Pursuit of Samuelson
by Chicago

Harro Maas, “Making Things Technical: Samuelson at MIT” in E. Roy Weintraub (ed.) MIT and the Transformation of American Economics (Durham: Duke University Press, 2014), pp. 272-294.

Roger Backhouse. Founder of Modern Economics: Paul A. Samuelson. Vol. I: Becoming Samuelson, 1915-1948 (Oxford University Press, 2017), Chapter 28 “Commitment to MIT.”

_________________________

Discussion with Ernest C. Colwell
(25 September 1946)

This discussion with President Colwell was highly satisfactory in that we considered in some detail and carefully, a number of important developments affecting the Department of Economics as follows:

1. I indicated to Mr. Colwell that the role of the Department of Economics at the University of Chicago should be reviewed, with the view of achieving a better division of labor among universities within the U. S. and internationally. An increasing number of universities can do creditable undergraduate work in economics, and also satisfactory graduate work up to and beyond the master’s. There are upwards of two score of such institutions in the U. S. Meanwhile, the number of students seeking training at the undergraduate level, and also in graduate work, has increased rapidly, and the post war promises further growth in numbers. Meanwhile, many Western countries are looking to the U.S. for some of their advanced education in other fields as well as in economics), this along with the development that is taking place within the U. S., suggests that the time has come for the University of Chicago to allocate its resources even more largely to the most advanced reaches of economics. I proposed that we examine carefully the implications of this kind of refocusing of our program. I was pleased that Mr. Colwell found himself drawn to the kind of analysis I was presenting. He made several contributions to it and concurred with the analysis itself. He very cordially urged the Department to examine this thesis and reconstitute itself to serve more effectively, taking full account of the division of labor within American academic institutions.

2. I reviewed in some detail the state of the Department, pointing out the losses that have come as the result of the death of Simons, the retirement of Wright, the resignations of Viner and Leland, and the leave of absence of Lange. I expressed our pleasure in achieving the appointment of Friedman and Blough, and reaffirmed my confidence in our judgment in seeking these appointments.

With regard to additional appointments, the following individuals were discussed.

(1) Mr. and Mrs. Hicks. I reviewed the agreements we had with Mr. Hutchins, which were the foundation of negotiations last spring. I indicated that the Hicks would arrive this week to be with us the fore-part of the fall quarter. If as a result of this opportunity of being together during part of the fall quarter, the Hicks see a real opportunity for their professional efforts at the University of Chicago, and we continue to be genuinely interested in bringing them to this University, would we be permitted to offer Mr. and Mrs. Hicks the salaries and positions that we had discussed last spring realizing we might have to go higher in the case of Mr. Hicks, for I was convinced his standing warranted our paying the maximum. Mr. Colwell said he was willing to authorize an offer of $10,000 to Mr. Hicks, and probed with me for a while the merit of making it higher instead of offering a position to both individuals. It was my judgment that our bargaining power would be at a maximum if we would offer both individuals a position, but that we could escape the liability of dual membership in one family by making the offer to Mrs. Hicks a term appointment — perhaps that of a Lecturer or Research Associate, say for three years at $3,000, and then reconsider at the end of three years, where she would have the privilege of withdrawing or redefining her relationship, and the Department would likewise have that privilege. Thus, the commitment would be permanent in the case of Mr. Hicks, but meaningful in terms of time turned into professional task to Mrs. Hicks and yet allowing flexibility in her case. Mr. Colwell accepted my proposal to proceed with an offer to both Mr. and Mrs. Hicks along the lines I have outlined.

(2) I reported Mr. Viner’s observations that it was not likely Mr. Robbins would leave the London School of Economics, and that, at least for a year, there was no point in making an indirect approach again to see whether or not he might feel free to accept an appointment in this country. Mr. Colwell fully concurred.

(3) I reviewed our offer to Mr. Colin Clark to come to the University of Chicago as guest professor for a year. I also pointed out we had included in the offer $1000 for travel expenses. I Indicated further that several of my colleagues were disposed to feel that we should now make an offer of a permanent appointment to Mr. Clark, since he is not able to obtain leave of absence to come as visiting professor. I then indicated why I felt, although tentatively, that it was unwise to make this move for a permanent relationship with the Department until we had a chance to become personally acquainted with Mr. Clark, although I continue to have a high regard for his professional work as evidenced by his major writings. Mr. Colwell concurred with the view I expressed, namely, we should not make an appointment on a permanent basis, but should try to get Mr. Clark to come as a visiting professor, if not this year, perhaps next year.

(4) I reviewed the case of Albert G. Hart, indicating that he had accepted a position at Columbia before we could approach him with an offer, and that it was important to his own growth to take the position at Columbia for a year. My plan is to approach him at the end of the year, let him weigh alternatives, including the opportunities as he sees them at Columbia. My proposal to Mr. Colwell was that we approach Hart along in February or March in order to induce him to come to Chicago. We discussed Hart’s background in some detail, Mr. Colwell concurred in the procedure I outlined to him.

(5) I then outlined at some length the case of Paul Samuelson of M.I.T. Mr. Colwell had not had the privilege of visiting with Samuelson at the time he was here. Samuelson visited with Hutchins and Gustavson, as far as Central Administration was concerned. I stated it was my judgment that Samuelson is one of the younger men in economics who has a high probability of achieving a distinguished career as an economist, and that in this respect his promise is most outstanding; that I had no doubt of the merits of the case intellectually and would press for an appointment, were that the only consideration, without delay, but that I had to achieve, however, an acceptance of Mr. Samuelson in the Department, not that a majority was lacking; a mandate existed satisfying the University administrative requirements. But the obstacle lies in what in substance is a matter of “senatorial courtesy” in behalf of the most distinguished and senior member of the Department, Professor Frank Knight. I expressed the hope it would be possible to have Professor Knight concur in the appointment and feel it was being made without any discourtesy to him and his professional role and standing in this University and in the profession. I felt this end must and could be achieved and that I was going to give a great deal of effort to it in the coming months. Pending the full exploration of what can be done in this connection I wanted to reserve decision as to whether or not to recommend the appointment of Mr. Samuelson. Mr. Colwell discussed at some length his own appraisal of the problem I had presented. He seemed to be pleased with the approach that was implicit in what I was relating to him. He made the point, and made it explicitly, that if the intellectual stature of Samuelson is as high as my judgment indicated, that it was exceedingly important the University move toward an appointment. I felt sure, though, that he was disposed to await the wishes of the Department, weighing carefully the factors I had tried to describe to him.

  1. At this point Mr. Colwell took me back to my general thesis, namely, the refocusing of the goals of the Department and the use of its resources, urging me to give active attention to this task. Whereupon I suggested the achievement of this role might well mean the setting up of 5 to 7 positions in the Department for individuals to spend 2 to 5 years at this university in what would be essentially a post-doctoral role as scholars, then accept positions elsewhere consistent with their accomplishments and promise. Mr. Colwell was drawn to the proposal as I had put it and referred briefly to similar planning and developments in other fields.

T. W. Schultz.

Source: University of Chicago Archives. Department of Economics, Records. Box 42, Folder “3”.

Categories
Agricultural Economics Chicago Suggested Reading Syllabus

Chicago. Assigned Readings for Price and Income Instability. T. W. Schultz, 1956

Beginning in 1957 Zvi Griliches took over the course at Chicago on Price and Income Instability with special reference to agriculture. The course was previously taught by T. W. Schultz. In his files for the course Griliches kept a copy of the course outline and readings for the Spring 1956 quarter taught by his predecessor.

There were 86 numbered items on Schultz’s reading list that he referenced by the item number with chapter/page selections for some of the items. You will have to jump down from the course outline to the list of course readings and back, which I find a very peculiar way to present a course outline, but it didn’t keep him from getting a Nobel prize in economics in 1979.

_________________________

T. W. Schultz
University of Chicago

Economics 355 B
Price and Income Instability

(as problems in economic organization with special reference to agriculture)

Economics 355 B will cover the following classes of problems:

      1. general characteristics of policies and programs which are related to agriculture.
      2. analysis of the price and income instability that confronts agriculture.
      3. alternative measures for reducing or accommodating price and income instability.
      4. some research proposals directed to this set of problems.
  1. General characteristics of policies and programs for agriculture by types of countries and during different periods.

(to be developed in class)

  1. Analysis of price and income instability that confronts agriculture.

38, chs. 4, 5, 6, 7, 10;
55, chs, 11 and 20.

    1. Instability of the economy as a whole.

19;
5;
23;
50;
67;
44.

    1. Particular instabilities of farm product prices during the stock period.

45: pp. 14-15, 65-66, 76-77;
31, Ch. 2;
10: pp. 42-44;
51.

      1. Producer supply schedule for stock period.

(1) Farm household activities.

55, ch. 14;
49, ch. 6.

(2) Farm-firm activities.

55, ch. 14;
68, ch. 2.

      1. Demand schedule confronting producers restricted to stock period.

55, ch. 11;
68, ch. 2.

      1. Spot and forward markets.

38, ch. 10;
27;
42;
43;
32;
37;
28;
29;
6;
14;
54;
58;
69;
70.

    1. Particular instabilities of farm product prices for time intervals longer than stock period (up to and including two production periods).
      1. Planned and unplanned variations in production (supply).

55, chs. 11, 12, 13;
40;
68, ch. 2.4;
12;
11;
1;
2b;
65;
13;
16;
61;
66.

      1. Shifts in demand schedule during relatively short periods.

55, ch. 11;
12;
68, ch. 2;
71;
8;
9;
17;
18;
22;
46;
56;
57;
59;
62;
63;
64.

  1. Measures for reducing or accommodating farm product prices and income instability.

7;
44;
67;
26, pp. 247-252.

    1. Particular abrupt and large shifts in the demand schedule.

55, pp. 344-346.

    1. Large year to year changes in production.

55, ch. 19;
38, ch. 13;
2b;
3;
4;
15;
24;
25;
30;
34;
35;
36;
41;
48;
52;
53;
60.

    1. Increasing the price elasticity of the relevant schedules.

55, pp. 349-358.

    1. By way of accommodation.

55, pp. 358-366.

      1. Farms with more capacity to cope with price and income instability.
      2. Possibilities by storage.
      3. Safeguarding income during depressions.
  1. Some research proposals

(to be based on III and the research interest of the student)

_________________________

T. W. Schultz
Spring, 1956

Economics 355 B
List of Readings

  1. Barber, Lloyd, “Variability of Wheat Yields by Counties in the United States,” BAE (September, 1951).
  2. (a) Barber, E. Lloyd, “Summerfallowing to Meet Weather Risks in Wheat Farming,” Agricultural Economics Research, III (October, 1951).
  1. (b) Barton, Glen T. and Cooper, Martin R., “Relation of Agricultural Production to Inputs,” Review of Economics and Statistics, XXX (May, 1948).
  2. Barber, E. Lloyd and Thair, Philip J., “Institutional Methods of Meeting Weather Uncertainty in the Great Plains,” Journal of Farm Economics, XXXII (August, 1950).
  3. Barber, E. Lloyd, Meeting Weather Risks in Kansas Wheat Farming, Kansas Agr. Ext. Sta. and BAE Agr. Report 44 (September, 1950).
  4. Bennett, M. K. and Associates, International Commodity Stockpiling as an Economic Stabilizer (Stanford: Stanford Univ. Press, 1949).
  5. Blau, G., “Some Aspects of the Theory of Futures Trading,” The Review of Economic Studies, XI (1943-44).
  6. Brownlee, O. H. and Johnson, D. Gale, “Reducing Price Variability Confronting Primary Producers,” Journal of Farm Economics, XXXII (May, 1950).
  7. Burk, Marguerite, “Recent Relationships between Income and Food Expenditure,” Agricultural Economics Research, BAE, III (July, 1951).
  8. ___________, “Changes in the Demand for Food from 1941 to 1950,” Journal of Farm Economics,” XXXIII (August, 1951).
  9. Clark, Colin, Conditions of Economic Progress, 2nd ed, (London: Macmillan, 1951).
  10. Cochrane, Willard W., An Analysis of Farm Price Behavior, Progress Report Agricultural Experinent Station, Pennsylvania State College (May, 1951)
  11. ___________, “Farm Price Gyrations — An Aggregative Hypothesis,” Journal of Farm Economics, XXIX (May, 1947).
  12. Day, Emily L. and Barber, Lloyd, Physical Risks in Farm Production, Selected References, 1930-1948. USDA Library, List 49 (August, 1949).
  13. Dow, J. C. R., “A Theoretical Account of Futures Markets,” The Review of Economic Studies, VII (1939-40).
  14. Ellickson, John C., “Hail Insurance on Growing Crops in the United States,” Agricultural Finance Review, BAE, XIII (November, 1950).
  15. Foote, Richard J. and Bean, Louis H., “Are Yearly Variations in CropYield Random?” BAE, Agricultural Economics Research, III (January, 1951).
  16. Fox, Karl A., “Factors Affecting Farm Income, Farm Prices and FoodConsumption,” Agricultural Economics Research, III (July, 1951).
  17. ___________ and Norcross, Harry C., “Agriculture and the General Economy,” Agricultural Economics Research, IV (January, 1952).
  18. Friedman, Milton, “Commodity-Reserve Currency,” Journal of Political Economy. LIX (June, 1951).
  19. Galbraith, John K., American Capitalism—The Concept of Countervailing Power (New York: Houghton Mifflin, 1952).
  20. Galbraith, John K., “Economic Preconceptions and Farm Policy,” American Economic Review, XLIV (March, 1954).
  21. Girschick, M. A. and Haavelmo, T., “Statistical Analysis of the Demand forFood,” Econometrica, XV (April, 1947).
  22. Graham, Benjamin, Storage and Stability (New York: McGraw-Hill, 1937).
  23. Halcrow, Harold G., “Actuarial Structure of Crop Insurance,”Journal of Farm Economics, XXXI (August, 1949).
  24. ___________, The Theory of Crop Insurance, Ph.D. Thesis, University of Chicago, 1948.
  25. Haley, Bernard F. (ed.), A Survey of Contemporary Economics, Vol. I (Homewood, Ill.: Richard D. Irwin, 1952).
  26. Hardy, C. O., “Recent Developments in the Theory of Speculation,” American Economic Review, XXVII (1937).
  27. ___________ and Lyon, L. S., “The Theory of Hedging,” Journal of Political Economy, XXXI (1923).
  28. Hawtrey, R. G., “Mr. Kaldor on the Forward Market,” The Review of Economic Studies, VIII (1940-41).
  29. Heisig, Carl P., “Income Instabillty in High Risk Farming Areas,” Journal of Farm Economics, XXVIII (1946).
  30. Hicks, J. R., Value and Capital (Oxford: Clarendon Press, 1939).
  31. Hicks, J. R., “Theory of Uncertainty and Profit,” Economica, VI (1939).
  32. Hoos, Sidney,“Relations between Agricultural Price Policy and MarketingResearch,” Journal of Farm Economics, XXXIII (August, 1951).
  33. Horton, Donald C., “Adaptation of the Farm Capital Structure to Uncertainty,” Journal of Farm Economics, XXXI (February, 1949).
  34. ___________, The Pattern of Farm Financial Structure, National Bureau of Economic Research, a preliminary draft (May, 1951).
  35. ___________ and Barber, E. Lloyd, “The Problem of Farm Business Survival in Areas of Highly Variable Rainfall,” Journal of Farm Economics, XXXI, Proceedings (November, 1942).
  36. Houthakker, H. S., “A Proposed Inquiry into Some Markets with Forward Trading,” Cowles Commission Discussion Paper Economics 2036 and Agricultural Economics Research Paper No. 5211, March 21, 1952. Mimeo.
  37. Johnson, D. Gale, Forward Prices for Agriculture (Chicago: University of Chicago Press, 1947).
  38. ___________, Trade and Agriculture: A Study of Inconsistent Policies (New York: John Wiley and Sons, 1950).
  39. ___________, “The Nature of the Supply Function for American Agriculture,” American Economic Review, XL (September, 1950).
  40. Jones, Lloyd E.,“Stabilizing Farming by Shifting Wheat Land to Grass in Northern Great Plains,” Journal of Farm Economics, XXXII (August, 1950).
  41. Kaldor, N., “A Note on the Theory of the Forward Market,”The Review of Economic Studies, VII (1939-40).
  42. ___________, “Speculation and Economic Stability,” The Review of Economic Studies, VII (1939-40).
  43. Keynes, J. M., “The Policy of Government Storage of Food-Stuffs and Raw Materials,” Economic Journal, XLVIII (September, 1938).
  44. Knight, Frank H., The Economic Organization (New York: Augustus M. Kelley, 1951).
  45. Mack, Ruth P., “The Direction of Change in Income and the Consumption Function,” Review of Economics and Statistics, XXX (1948).
  46. Mehrens, George L., “Comparative Costs of Agricultural Price Supportsin 1949,” Proceedings, American Economic Review, XLI (May, 1951).
  47. Nebraska Agr. Exp. Sta., Toward Stability in the Great Plains Economy, Proceedings of a conference held at Custer, South Dakota in 1949. Agr. Exp. Sta. Bul. 399 (July, 1950).
  48. Reid, M. G., Food for People (New York: Wiley, 1943).
  49. Reifler, Winfield, “A Proposal for an International Buffer-Stock Agency,” Journal of Political Economy, LIV (December, 1946).
  50. Robbins, Lionel,“Elasticity of Demand for Income in Terms of Effort,” Economica (1930).
  51. Schickele, Rainer, “Farm Business Survival under Extreme Weather Risk,”Journal of Farm Economics, XXXI (November, 1949),
  52. ___________, “Farmers Adaptation to Income Uncertainty,” Journal of Farm Economics, XXXII (August, 1950).
  53. Schultz, T. W., Production and Welfare of Agriculture (New York: Macmillan, 1949).
  54. ___________, The Economic Organization of Agriculture (New York: McGraw-Hill, 1953).
  55. Schultz, Henry, The Theory and Measurement of Demand (Chicago: University of Chicago Press, 1938).
  56. ___________, “The Shifting Demand for Selected Agricultural Commodities, 1875-1929,” Journal of Farm Economics, XIV (April, 1932).
  57. Stewart, Blair, An Analysis of Speculative Trading in Grain Futures, USDA Commodity Exchange Authority, Bul. No. 1001. October, 1942.
  58. Stone, J. R. K., “Analysis of Market Demand,” Journal of the Royal Statistical Society, CVIII (1945).
  59. Thair, Philip J., Stabilizing Farm Income against Crop Yield Fluctuations, Agr. Exp. Sta. North Dakota and BAE Bul. 362, September, 1950).
  60. Timoshenko, P., “Variability in Wheat Yields and Outputs, Part I. Cycles or Random Fluctuations,” Wheat Studies of the Food Research Institute, XVIII (Stanford, California, 1942).
  61. Tintner, Gerhard,“Multiple Regression for System of Equations,” Econometrics, XIV (January, 1946).
  62. Tobin, James,“A Statistical Demand Function for Food in the U.S.A.,” Journal of the Royal Statistical Society, CXIII (1950), Part II.
  63. U.S.D.A., BAE, Consumption of Food in the United States, 1909-48, Misc. Pub. 691 (August, 1949).
  64. U.S.D.A., BAE, Farm Production Practices, Costs and Returns, Stat. Bul. 83 (October, 1949).
  65. U.S.D.A., Fluctuations in Crops and Weather, 1866-1948, Stat. Bul. 101 (June, 1951).
  66. Viner, Jacob, “International Finance in the Post-War World,”Lloyds Bank Review (October, 1946).
  67. Waugh, Frederick V., Readings in Agricultural Marketing (Ames: Iowa State College Press, 1954).
  68. Williams, J. B., “Speculation and the Carryover,” The Quarterly Journal of Economics, LI (1936).
  69. Working, H. “Theory of the Inverse Carrying Charge in Futures Markets,” Journal of Farm Economics, XXX (1948).
  70. Working, E. J., “Appraising the Demand for American Agricultural Output during Rearmament,” Journal of Farm Economics XXXIV, May, 1952.
Supplementary List #1
  1. Bauer, P. T., West African Trade (Cambridge: The University Press, 1954), esp. Parts 3, 5, and 6.
  2. ___________ and Paish, F. , “The Reduction of Fluctuations in the Incomes of Primary Producers,” Economic Journal, LXII (December, 1952).
  3. ___________, “The Reduction of Fluctuations in the Incomes of Primary Producers Further Considered,” Economic Journal, LXIV, (December, 1954).
  4. Friedman, Milton, “The Reduction of Fluctuations in the Incomes of Primary Producers: A Critical Comment, Economic Journal, LXIV (December 1954).
  5. Gustafson, Robert L.,Optimal Carryover Rules for Grains, The University of Chicago RMA Study (January 31, 1954). Agricultural Economics Research Paper).
  6. Heady, Earl O., Kehrberg, Earl W., and Jebe, Emil B., Economic Instability and Choices Involving Income and Risk in Primary or Crop Production, Res. Bul. 404 (January, 1954) Agric. Exp. Iowa State College.
  7. Heady, Earl, “Diversification in Resource Allocation and Minimization of Income Variability,” Journal of Farm Economics XXXIV (November, 1952).
  8. Johnson, D. Gale, “Competition in Agriculture: Fact or Fiction?”American Economic Review, Papers and Proceedings XLIV (May, 1954).
  9. Kaldor, Donald R. and Heady, Earl O., An Exploratory Study of Expectations, Uncertainty and Farm Plans in Southern Iowa Agriculture, Res. Bul. 408 April, 1954) Agric. Exp. Sta. Iowa State College.
  10. Kaplan, Marshall.On Estimating Demand Parameters With Special Reference to Food, AgriculturalEconomics Research Paper No. 5415. September 24, 1954.
  11. Lee, Ivan M., “Temperature Insurance — An Alternative to Frost Insurancein Citrus,” Journal of Farm Economics, XXXV (February, 1953).
  12. Nordin, J. A., Judge, George G., and Wohby, Omar, Application of Econometric Procedures to Demands for Agricultural Products, Res. Bul 410 (July, 1954) Agri. Exp. Sta. Iowa State College.
  13. Tolley, George, “Minimizing Grain Storage Costs,” Journal of Farm Economics, XXXV (November, 1953).
  14. Foreign Agricultural Service. Agricultural Market and Price Policies in Foreign Countries. Report No. 74 (September, 1953).

Source: Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Syllabus and exams, 1955-1959”.

Image Source:  T. W. Schultz, University of Chicago Photographic Archive, apf1-07484, Special Collections Research Center, University of Chicago Library. Colorized by Economics in the Rear-view Mirror.

Categories
Chicago Economics Programs

Chicago. Program of Political Economy. Thick course descriptions. 1904-1905

Broschures that advertise economics departments are often useful summaries of the “order of battle” for their educational and research missions. The Chicago Department of Political Economy was about a dozen years in business when this programme, transcribed below, was published. The course descriptions are somewhat thicker than are typically found in full university catalogs that must share space for the many divisions and schools that constitute the larger institution. 

Incidentally, the copy of the printed programme that was transcribed for this post was found in an archival box of material dealing with graduate studies in the Division of History, Government, and Economics at Harvard University. Then as now, prudence demands keeping an eye on your competition. 

______________________________

Related Posts on the Early Years
of the Department of Political Economy
of the University of Chicago

First detailed announcement of Political Economy program at the University of Chicago, 1892.

General Regulations for the degree of Ph.D. at the University of Chicago, 1903.

Twenty-Fifth Anniversary of the Department of Political Economy, 1916.

______________________________

CONSPECTUS OF COURSES,
1904-1905.
POLITICAL ECONOMY.

All courses are Mj [major] unless otherwise indicated.

SUMMER AUTUMN WINTER SPRING
1 Principles of Political
  Economy
(Hill) 9:00
1 Principles of Political Economy
a (Hill) 8:30
b (Davenport) 12:00
1 Principles of Political Economy
(Hill) 12:00
2 Principles of Political Economy Con’d
a (Hill) 8:30
b (Davenport) 12:00
2 Principles of Political Economy Con’d
(Davenport) 12:00
3 Economic and Social History
(Morris) 2:00
3 Economic and Social History
(Morris) 12:00
4 History of Commerce
(Morris) 12:00
5B Commercial Geography for Teachers
(Goode) 1:30
5 Commercial Geography
(Mr. —) 8:30
8 Mathematical Problems of Insurance
(Epsteen)
6 Modern Industries
(Mr. —) 11:00
7 Insurance
(Davenport) 8:30
[9 Law of Insurance]
(Bigelow)
10 Accounting
(Mr. — ) 11:00
11 Special Problems of Accounting
(Several Experts)
12 Modern Business Methods
(Clow) 8:00
12 Modern Business Methods
(Mr. —) 9:30
20 History of Political Economy
(Veblen) 11:00
21 Scope and Method
(Veblen) 11:00
22 Finance
(Davenport) 8:30
24 Financial History of the United States
(Cummings) 8:00
24 Financial History of the United States
(Cummings) 2:00
23 Tariff Reciprocity and Shipping
(Cummings) 9:30
26 American Agriculture
(Hill) 10:30
26 American Agriculture
(Hill) 10:30
25 Economic Factors in Civilization
(Veblen) 11:00
27 Colonial Economics
(Morris) 9:30
40 Value
(Davenport) 8:30
41 Labor and Capital
(Laughlin) 12:00
44 Socialism
(Veblen) 9:30
46 Trade Unions
(Cummings)
9:30
45 Industrial Combinations (Veblen) 9:30 43 Economics of Workingmen
(Cummings) 9:30
46 Trades Unions
(Cummings) 12:00
50 Money
(Laughlin) 12:00
51 Banking
(Mr. —) 8:30
50 Money
(Laughlin) 12:00
[52 Advertising]

53 Practical Banking
(Mr. — ) 8:30

60 Railways
(Hill) 2:00
61 Railway Rates
(Meyer) 2:00
62 Government Ownership (I)
(Meyer) 2:00
63 Government Ownership (II)
(Meyer) 2:00
64 American Competition
(Meyer) 3:00
70 Statistics
(Cummings) 8:30
71 Statistics of Wages
(Cummings) 12:00
80 Seminar
(Laughlin)
81 Seminar
(Laughlin)
[82 Seminar
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THE DEPARTMENT
OF POLITICAL ECONOMY.

OFFICERS OF INSTRUCTION.

JAMES LAURENCE LAUGHLIN, Ph.D., Professor and Head of the Department of Political Economy.

THORSTEIN B. VEBLEN, Ph.D., Assistant Professor of Political Economy.

WILLIAM HILL, A.M., Assistant Professor of Political Economy.

JOHN CUMMINGS, Ph.D., Assistant Professor of Political Economy.

HENRY RAND HATFIELD, Ph.D., Assistant Professor of Political Economy.

HERBERT JOSEPH DAVENPORT, Ph.D., Assistant Professor of Political Economy.

HUGO RICHARD MEYER, A.B., Assistant Professor of Political Economy.

ROBERT MORRIS, A.B, LL.B., Instructor in Political Economy.

F. R. CLOW, Professor of Political Economy, State Normal School, Oshkosh, Wis. (Summer Quarter, 1904).

FELLOWS.
1904-1905.

EDITH ABBOTT, A.B
EARL DEAN HOWARD, Ph.B.
WILLIAM JETT LAUCK, A.B.

INTRODUCTORY.

The work of the department is intended to provide, by symmetrically arranged courses of instruction, a complete training in the various branches of economics, beginning with elementary work and passing by degrees to the higher work of investigation. A chief aim of the instruction will be to teach methods of work, to foster a judicial spirit, and to cultivate an attitude of scholarly independence. (1) The student may pass, in the various courses of instruction, over the whole field of economics. (2) When fitted, he will be urged to pursue some special investigation. (3) For the encouragement of research and the training of properly qualified teachers of economics, Fellowships in Political Economy have been founded. (4) To provide a means of communication between investigators and the public, a review, entitled the Journal of Political Economy, has been established, to be edited by the officers of instruction in the department; while (5) larger single productions will appear in a series of bound volumes to be known as Economic Studies of the University of Chicago. [For links see below]

FELLOWSHIPS.

The Fellowships here offered by the Department of Political Economy are independent of those offered by the allied departments of History, Political Science, or Sociology.

Appointments will be made only on the basis of marked ability in economic studies and of capacity for investigation of a high character. It is a distinct advantage to candidates to have been one year in residence at the University. Candidates for these Fellowships should send to the President of the University a record of their previous work and distinctions, degrees and past courses of study, with copies of their written or printed work in economics. Applications should be sent in not later than March 1 of each year Appointments will be made during the first week of April.

Fellows are forbidden to give private tuition, and may be called upon for assistance in the work of teaching in the University or for other work; but in no case will they be expected or permitted to devote more than one sixth of their time to such service.

In addition, one Graduate Scholarship, yielding a sum sufficient to cover the annual tuition fees, is awarded to the best student in economics just graduated from the Senior Colleges; and a similar Scholarship is given to the student graduating from the Junior Colleges who passes the best examination at a special test.

CANDIDACY FOR HIGHER DEGREES.

Graduate courses are provided for training and research in subjects such as wages, money, agriculture, socialism, industrial combinations, statistics, demography, finance, and the like. Specialization may be carried on in many parts of the field, under special direction in the Seminar, whereby each student receives a personal appointment for one hour a week. The work is so adjusted as to form an organized scheme leading by regular stages to productive results suitable for publication.

Candidates for the degree of A.M. will not be permitted to offer elementary courses in Political Economy as part of the work during the year’s residence. The work of students taking Political Economy as a secondary subject for the degree of A.M., should include (1) the general principles of economics (as contained in Courses 1 and 2, or an equivalent); (2) the history of Political Economy; and (3) the scope and method of Political Economy.

The work of candidates for the degree of Ph.D., taking Political Economy as a secondary subject, should include, in addition to the above requirements for the degree of A.M., on (1) Public Finance, and (2) on some descriptive subject as, e.g., Money, or Tariff, or Railways, etc.; and the examination will be more searching than that for the degree of A.M.

In all cases candidates should consult early with the heads of the departments within which their Major and Minor subjects are taken.

Before being admitted to candidacy for the degree of Doctor of Philosophy, in case Political Economy is chosen as the principal subject, the student must furnish satisfactory evidence to the head of the department that he has been well prepared in the following courses (or their equivalents at other institutions): History of Europe in the Seventeenth and Eighteenth Centuries (History 11); Europe in the Nineteenth Century (History 12); Later Constitutional Period of the United States; the Civil War and the Reconstruction (History 18); Comparative National Government (Political Science 11); Federal Constitutional Law of the United States (Political Science 21); Elements of International Law (Political Science 41); and Introduction to Sociology (Sociology 72).

PUBLICATIONS

As a means of communication between investigators and the public, the University issues quarterly the Journal of Political Economy, the first number of which appeared in December of 1892. Contributions to its pages will be welcomed from writers outside as well as inside the University the aim being not only to give investigators a place of record for their researches, but also to further in every possible way the interests of economic study throughout the country. The Journal will aim to lay more stress than existing journals upon articles dealing with practical economic questions. The editors will welcome articles from writers of all shades of economic opinion, reserving only the privilege of deciding as to merit and timeliness.

Longer investigations, translations of important books needed for American students, reprints of scarce works, and collections of materials will appear in bound volumes in a series of Economic Studies of the University of Chicago, of which the following have already been issued:

No. I. The Science of Finance, by Gustav Cohn. Translated by Dr. T. B. Veblen, 1895, 8vo, pp. xi+800. Price, $3.50.

No. II. History of the Union Pacific Railway, by Henry Kirke White, 1895, 8vo, pp. 132. Price, $1.50.

No. III. The Indian Silver Currency, by Karl Ellstaetter. Translated by J. Laurence Laughlin, 1896, 8vo, pp. 116. Price, $1.25.

No. IV. State Aid to Railways in Missouri, by John Wilson Million, 1897, 8vo, pp. 264. Price, $1.75.

No. V. History of the Latin Monetary Union, by Henry Parker Willis, 1901, 8vo, pp. ix + 332. Price $2.00.

No. VI. The History of the Greenbacks, with Special Reference to the Economic Consequences of Their Issue, by Wesley Clair Mitchell, 1903, 8vo, pp. xiv + 500. Price, $4.00, net.

No. VII. Legal Tender: A Study in English and American Monetary History, by Sophonisba P. Breckinridge, 1903, 8vo, pp. xvii + 180. Price, $1.50, net.

LIBRARY FACILITIES.

In the suite of class-rooms occupied by the department will be found the Economic Library. Its selection has been made with great care, in order to furnish not only the books needed for the work of instruction in the various courses, but especially collections of materials for the study of economic problems. The University Library contains an unusually complete set of United States Documents, beginning with the First Congress. It is believed that ample provision has thus been made for the work of serious research. The work of the students will necessarily be largely carried on in the Economic Library where will also be found the past as well as the current numbers of all the European and American economic journals.

The combined library facilities of Chicago are exceptional. The Public Library, maintained by a large city tax, the Newberry Library, and the Crerar Library, with a fund of several millions of dollars, which has provided books on Political Economy, will enable the student to obtain material needed in the prosecution of detailed investigation.

SPECIAL ADVANTAGES.

For the convenience of those who wish to know the branches of economics in which especial advantages are offered by the department, attention is called to the new facilities afforded for specialization in several directions:

RAILWAYS.

Apart from the fundamental training in the general economic field, a new and exceptional series of advanced courses in the economic side of railways has been provided. It is believed that no such extended and useful courses have ever been offered before on this subject. Beginning with the usual general course on railway transportation, four new courses are presented for advanced students.

LABOR AND CAPITAL.

In view of the pressing importance of questions touching upon the rewards of labor and capital, an exceptional arrangement of courses dealing both with the underlying principles and the practical movements of the day have been prepared upon new and extended lines.

MONEY.

Opportunities for specialization in the field of money and banking have been offered in the past, but new courses have been organized in order to permit a more thorough study in these subjects, both theoretical and practical, than has ever been possible before.

LABORATORY FOR STATISTICAL RESEARCH WORK.

The University has equipped a laboratory for statistical research work in which students are given training in the collection and tabulation of statistical data, as well as in the scientific construction of charts, and diagrams. The object of the work is to familiarize students with practical methods employed in government bureaus, municipal, state, and federal, in the United States and in other countries, and in private agencies of sociological and economic investigation. Men are trained to enter the service of such bureaus or agencies of social betterment as statisticians, capable of undertaking any work requiring expert statistical service. The Departments of Political Economy and of Sociology co-operate in the direction of statistical investigations.

COURSES OF INSTRUCTION.
Summer Quarter, 1904—Spring Quarter, 1905.

M=Minor course a single course for six weeks.
Mj=Major course=a single course for twelve weeks

GENERAL.

The courses are classified as follows:

Group 1, Introductory and Commercial: Courses 1, 2, 3, 4, 5, 6.

Group II, Advanced Business Courses: Courses 7, 8, 9, 10, 11, 12.

Group III, General Economic Field: Courses 20, 21, 22, 23, 24, 25, 26, 27, 29-30, 31-32.

Group IV, Labor and Capital: Courses 40, 41, 42, 43, 44, 45, 46, 47.

Group V, Money and Banking: Courses 50, 51, 52, 53, 54.

Group VI, Railways: Courses 60, 61, 62, 63, 64.

Group VII, Statistics: Courses 70, 71, 72.

Group VIII, Seminars: Courses 80, 81, 82.

Students are advised to begin the study of economics not later than the first year of their entrance into the Senior Colleges; and students of high standing, showing special aptitude for economic study, may properly take the Courses of Group I in the last year of the Junior Colleges.

For admission to the courses of Groups II and III, a prerequisite is the satisfactory completion of Courses 1 and 2 in the department, or an equivalent. Course 1 is not open to students who do not intend to continue the work of Course 2.

JUNIOR COLLEGE COURSES.
Group I. — Introductory and Commercial. 

1 and 2. Principles of Political Economy. — Exposition of the laws of modern Political Economy.

Course 1.

Mj. Summer Quarter; 8:00. Assistant Professor Hill.

Mj. Autumn Quarter; 2 sections, 8:30 and 12:00. Assistant Professors Hill and Davenport.

Mj. Winter Quarter; 12:00. Assistant Professor Hill.

Course 2.

Mj. Winter Quarter; 2 sections: 8:30 and 12:00. Assistant Professors Hill and Davenport.

Mj. Spring Quarter; 12:00. Assistant Professor Davenport.

Courses 1 and 2 together are designed to give the students an acquaintance with the working principles of modern Political Economy. The general drill in the principles cannot be completed in one quarter; and the department does not wish students to elect Course 1 who do not intend to continue the work in Course 2. Descriptive and practical subjects are introduced as the principles are discussed, and the field is only half covered in Course 1. Those who do not take both 1 and 2 are not prepared to take any advanced courses.

  1. Economic and Social History. — It is thought that the course may be of advantage to students of Political Science and History by giving them a view of the economic side of the social and political life of the past one hundred and fifty years. Special attention is devoted to the study of the economic effects of the Colonial System; the American and French Revolutions; the “industrial revolution;” the effects of invention and the new transportation upon the movement and grouping of population; the discoveries of the precious metals in North America, South America, Africa, and Australia; slavery, the Civil War, the new South, and the redistribution of industries in the United States; the progress of Great Britain since the repeal of the Corn Laws; and the recent development of German industry.

Mj. Autumn 2:00 and Spring Quarters; 12:00.
Mr. Morris.

Course 3 is required of all students in the College of Commerce and Administration.

  1. History of Commerce. — A brief general survey of ancient medieval and modern commerce. Consideration of the articles of commerce, the market places, the trade routes, methods of transportation, and the causes which promoted and retarded the growth of commerce in the principal commercial nations.

Mj. Autumn Quarter; 12:00. Mr. Morris.

  1. Commercial Geography. — A study of the various countries and their chief products; the effect of soil, climate, and geographical situation in determining national industries and international trade, commercial routes, seaports; the location of commercial and industrial centers; exports and imports; the character, importance, and chief sources of the principal articles of foreign trade.

Mj. Autumn Quarter; 8:30.
Mr. ———

Required of all students in the
College of Commerce and Administration.

  1. Modern Industries. — This elementary course, requiring no previous study of economics, examines the present organization of some of the leading industries. Study is made of the internal business organization, the processes of manufacture, the effect of inventions, etc. Emphasis will be placed on the manufactures of the United States.
    The class will visit a number of large industrial establishments in and near Chicago.

Mj. Autumn Quarter; 11:00.
Mr. ———

SENIOR COLLEGES AND GRADUATE COURSES.
Group II. — Advanced Business Courses.
  1. Insurance. — This course will aim to cover those aspects of insurance important to the practical business man, and to serve at the same time as a descriptive and theoretical treatment adapted to the needs of students intending to specialize in the actuarial and legal aspect of the subject. The history and theory of insurance, the bearing of these on the different insurance relations of modern business, including accident, health, burial, suretyship, credit forms, and the like will be examined. Especial emphasis will, however, be given: (1) to Life Insurance, the various forms of organization, assessment, fraternal, stock, and mutual; the theory of rates, mortality, expense, reserve, and interest aspects; the different combinations of investment and mortality contracts, loan and surrender values, dividends, distribution periods; (2) to Fire Insurance, the various forms of business organization, the terms and conditions of the insurance contract, the different forms of hazard, and the competition and combination of rates therefor; the theory of reserves and co-insurance, and the problem of the valued policy laws; (3) the general principle of public supervision with regard to the different forms of insurance, and the wider question of public ownership.

Mj. Winter Quarter; 8:30.
Assistant Professor Davenport.

  1. The Mathematics of Insurance. — This course presupposes some acquaintance with the descriptive aspect of insurance. The course is devoted particularly to the mathematical principles of Life Insurance. The necessary elements of the theory are selected from the theories of probability, finite differences, and interpolation. Applications are made in particular to the following problems: The examination of the different mortality tables and the basing of mortality rates thereon; the loading of expenses and reserves and the variations of premiums, as affected by the prospective earnings of investments: the computation of total reserves; the fixation of loan and surrender values of paid-up insurance, whether by life or term extension; the computation of present and deferred annuities as affected by considerations of age, life, term, endowment, joint-life, and annuity policies.

Mj. Spring Quarter; 12:00.
Mr. Epsteen.

Prerequisite: Trigonometry and College Algebra
(Mathematical Courses 1, 2 or 1, 5 or 4, 5).
See Mathematics 9.

  1. Law of Insurance. — Insurable interest in various kinds of insurance and when it must exist; beneficiaries; the amounts recoverable and valued policies; representations; warranties; waiver and powers of agents; interpretation of phrases in policies; assignment of insurance.

Mj. Spring Quarter.
Assistant Professor Bigelow.

Text book: Wambaugh, Cases on Insurance.

  1. Accounting. — The interpretation of accounts viewed with regard to the needs of the business manager rather than those of the accountant: the formation and meaning of the balance sheet; the profit and loss statement and its relation to the balance sheet; the capital accounts, surplus, reserve, sinking funds; reserve funds, their use and misuse; depreciation accounts; other accounts appearing on credit side; assets; methods of valuation; confusing of assets and expenses; capital expenditures and operating expenses; capital assets, cash, and other reserves.

Prerequisite: The Course in Bookkeeping offered by the Department of Mathematics.

Mj. Winter Quarter; 11:00.
Mr. ———.

  1. Special Problems in Accounting.
    1. Bank accounting.
    2. The duties of an auditor; methods of procedure; practice; problems frequently met.
    3. Appraisal and Depreciation.
    4. Railway Accounting. A consideration of the principal features. Determination of the four main divisions of expense. The relation between capital expenditures and profit and loss.
    5. The Public Accountant. Legal regulations; duties and methods; constructive work in devising system of accounting to fit special needs. Practice in comparison of various systems. The advantages of various devices, loose-leaf and card systems; voucher system; cost keeping.

Mj. Spring Quarter.
Conducted by experts from Chicago institutions.

  1. Modern Business Methods. Corporation Finance. — Speculation, investment, exchange. The course aims to make clear to the student the meaning of the commercial and financial columns of current journals and to examine the economic significance of the business transactions thus reported. Attention is given among other things to the reports of the money market, the business on stock and produce exchanges, market quotations, the various forms of investment securities, and foreign exchange.

Summer Quarter; 11:30.
Mj. Spring Quarter; 9:30.
Professor Clow.

Group III — General Economic Field.
  1. History of Political Economy. — Lectures, Reading, and Reports. This course treats of the development of Political Economy as a systematic body of doctrine; of the formation of economic conceptions and principles, policies, and systems. The subject will be so treated as to show the continuity and systematic character of Political Economy as an intelligent explanation of economic facts. Both the history of topics and doctrines and that of schools and leading writers will be studied. Attention will be given to the commercial theories of the Mercantile System, the Physiocratic School, Adam Smith and his immediate predecessors, the English writers from Adam Smith to J. S. Mill, and the European and American writers of the nineteenth century. Selection will be made of those who have had great influence, and who have made marked contributions to Political Economy. The student will be expected to read prescribed portions of the great authors bearing on cardinal principles. It is hoped that in this way he will learn to see the consistency and relations of economic theories and to use the science as a whole, and not as a mere mass of arbitrary formulæ or dicta. A special feature of the work will be a thorough study of Adam Smith and of Ricardo.

Mj. Autumn Quarter; 11:00.
Assistant Professor Veblen.

  1. Scope and Method of Political Economy. — The course treats of the premises on which the analysis of economic problems proceeds, the range of problems usually taken up for investigation by economists, the methods of procedure adopted in their solution, the character of the solutions sought or arrived at, the relations of Political Economy to the other Moral Sciences, as well as to the influence of the political, social, and industrial situation in determining the scope and aim of economic investigation. Special attention is given to writers on method, as Mill, Cairnes, Keynes, Roscher, Schmoller, Menger.

Mj. Winter Quarter; 11:00.
Assistant Professor Veblen.

  1. Finance. — In this course it is intended to make a comprehensive survey of the whole field of public finance. The treatment is both theoretical and practical, and the method of presentation historical as well as systematic. Most emphasis is placed upon the study of taxation, although public expenditures, public debts, and financial administration are carefully studied.

Mj. Spring Quarter; 8:30.
Assistant Professor Davenport.

  1. Tariffs, Reciprocity, and Shipping. — The course of legislation and the development of our commercial policy is followed, and an effort made to indicate the influence of our protective tariffs upon the development of our domestic industries, upon the growth and character of our international trade, and incidentally upon the occurrence of industrial crises and the continuance of industrial prosperity at different periods in our history. Foreign trade policies and schemes for imperial tariff federation are taken up, and especial attention given to the negotiation of reciprocity treaties, as well as to recent attempts which have been made through federal legislation granting subsidies to build up American shipping.

Mj. Spring Quarter; 11:00.
Assistant Professor Cummings.

  1. Financial History of the United States. — In this course the financial history of the United States is followed from the organization of our national system in 1789 to the close of the Spanish war. The following topics may be mentioned as indicating the scope of the course; the funding and management of the Revolutionary and other war debts; the First and Second United States Banks; the Independent Treasury; the present national banking system; Civil War financiering with especial reference to bond and note issues, and resort to legal tender currency; the demonetization of silver and issue of silver certificates; inflation of the currency and the gold reserve; the currency act of 1900. This study of the course of legislation upon currency, debts, and banking in the United States is based upon first-hand examination of sources, and students are expected to do original research work.

Summer Quarter; 8:00.
Mj. Autumn Quarter; 9:30.
Assistant Professor Cummings.

  1. Economic Factors in Civilization. — The course is intended to present a genetic account of the modern economic system by a study of its beginnings and the phases of development through which the present situation has been reached. To this end it undertakes a survey of the growth of culture as affected by economic motives and conditions. With this in view, such phenomena as the Teutonic invasion of Europe, the Feudal system, the rise of commerce, the organization of trade and industry, the history of the condition of laborers, processes of production, and changes in consumption, will be treated.

Mj. Spring Quarter; 11:00.
Assistant Professor Veblen.

  1. Problems of American Agriculture. — Special attention will be given to the extension and changes of the cultivated area of the United States; the methods of farming; the influence of railways and population, and of cheapened transportation; the fall in value of Eastern farm lands; movements of prices of agricultural products; European markets; competition of other countries; intensive farming; diminishing returns; farm mortgages; and the comparison of American with European systems of culture.

Summer Quarter; 10:30.
Mj. Winter Quarter; 9:30.
Assistant Professor Hill.

  1. Colonial Economics. — The economics of colonial administration, including some account of commercialism, past and present, and of modern trade theories of imperial federation, trade relations, financial policies, and economic development and dependence of colonies.
    A brief historical account of American and foreign experience serves as introduction to a fuller consideration of economic problems involved in modern colonial administration. In the light of this experience study is undertaken of some economic problems which have arisen in Cuba, Porto Rico, Hawaii, and the Philippine Islands.

Mj. Spring Quarter; 9:30.
Mr. Morris.

29, 30. Oral Debates. — Selected Economic Topics. Briefs. Debates. Criticism.

2M. Autumn and Winter Quarters; Mon., 3:00-6:00.
Assistant Professor Hill, Mr. Chandler, and Mr. Gorsuch.

31, 32. Argumentation. — To be taken in connection with English 9.

2 hrs. a week.
2M. Autumn and Winter Quarters; Wed., 3:00.
2M. Autumn and Winter Quarters.
Mr. Chandler.

Group IV. — Labor and Capital.
  1. Theory of Value. — After a brief preliminary survey of the discussions prior to Adam Smith, the cost of production-theory as developed at the hands of Ricardo, McCulloch, James Mill, Senior, J. S. Mill, and Cairnes is taken up for detailed study. Then the utility theory of value, as presented by Jevons and Austrian economists, is examined. Finally, the attempts made by such writers as Marshall, Dietzel, Pantaleoni, Clark, Patten, McFarlane, Hobson, etc., to frame a more satisfactory theory of value by combining the analysis of cost and of marginal utility, are reviewed.

Mj. Autumn Quarter; 8: 30.
Assistant Professor Davenport.

  1. Labor and Capital. — Unsettled problems of distribution. The more abstruse questions of distribution will be considered. No student, therefore, can undertake the work of this course with profit who has not already become familiar with the fundamental principles. The course is open only to those who have passed satisfactorily Course 2, or who can clearly show that they have had an equivalent training. The subjects to be considered will be as follows: The wages-fund and other theories of wages, the interest problem, managers’ profits, and allied topics. The discussion will be based upon selected passages of important writers. The study of wages, for example, will include reading from Adam Smith, Ricardo, J. S. Mill, Longe, Thornton, Cairnes, F. A. Walker, Marshall, George, Böhm-Bawerk, Hobson, J. B. Clark, and others. Students will also be expected to discuss recent important contributions to these subjects in current books or journals.

Mj. Winter Quarter; 12:00.
Professor Laughlin.

  1. Economics of Workingmen. — Continuing the study of distribution (Course 41), examination is here undertaken of social movements for improving the condition of labor, to determine how far they are consistent with economic teaching, and likely in fact to facilitate or to retard economic betterment of workingmen. Efforts to increase earnings through modification of the wages system itself, resort to legislation, and the purposes and practices of labor organization are discussed, and the effect upon labor efficiency, earning capacity and steadiness of employment, of modern industrial systems; workingmen’s insurance; co-operation; profit-sharing; competition of women and children; industrial education; social-settlement work; consumers’ leagues. Interest centers about practical efforts for economic amelioration of employment conditions in “sweated” and in other industries. These studies are supplemented by statistical data on the condition of labor in different countries.

Mj. Winter Quarter; 9:30.
Assistant Professor Cummings.

Note. — Although open in certain cases to students of Sociology and others who have had the equivalent of the economic Courses 1 and 2, this course can be taken to best advantage by those only who have already had Course 41.

  1. Socialism — A history of the growth of socialistic sentiment and opinion as shown in the socialistic movements of the nineteenth century, and the position occupied by socialistic organizations of the present time. The course is in part historical and descriptive, in part theoretical and critical. The programmes and platforms of various socialistic organizations are examined and compared, and the theories of leading socialists are taken up in detail. Marx is given the chief share of attention, but other theoretical writers, such as Rodbertus, Kautsky, Bernstein, are also reviewed. The factors which at the present time further or hinder the spread of socialism, and what are its chances of being carried through or of producing a serious effect upon the institutions of modern countries, are considered.

Mj. Spring Quarter; 9:30.
Assistant Professor Veblen.

  1. Organization of Business Enterprise—Trusts. — A discussion of the growth of the conditions which have made large business coalitions possible, the motives which have led to their formation, the conditions requisite to their successful operation, the character and extent of the advantages to be derived from them, the drawbacks and dangers which may be involved in their further growth, the chances of governmental guidance or limitation of their formation and of the exercise of their power, the feasible policy and methods that may be pursued in dealing with the trusts. The work of the course is in large part investigation of special subjects, with lectures and assigned reading.

Mj. Autumn Quarter; 9:30.
Assistant Professor Veblen.

  1. Trades Unions and the Labor Movement — An historical and comparative study of the trades union movement in the United States and in foreign countries. Negotiation and maintenance of wage-compacts; methods of arbitration, conciliation and adjustment; trades union insurance and provision for the unemployed; incorporation and employés’ liability; the precipitation and conduct of strikes; and in general all concrete issues involved in the organization of labor for collective bargaining with employers, with especial reference to the working programs of the more important trades unions at the present time.

Summer Quarter; 9:00.
Mj. Spring Quarter; 12:00.
Assistant Professor Cummings.

  1. The Industrial Revolution and Labor Legislation. — The social consequences to the wage-earner of the development of the factory system of industry and of industrial development, more particularly during the last half of the 19th century, are taken up historically and descriptively. The social status of the modern wage-earner is contrasted with that of the handicraftsman working under more primitive conditions, and especial attention is given to the development of the modern wages system of remuneration, the historical modification of the labor contract in its legal aspects, and, finally, to the course of labor legislation which has in different countries accompanied industrial reorganization and development.

Mj.
Assistant Professor Cummings.

[Not to be given in 1904-5.]

Group V — Money and Banking.
  1. Money and Practical Economics.— An examination is first made of the principles of money, whether metallic or paper; then either the subject of metallic or paper money is taken up and studied historically, chiefly in connection with the experience of the United States, as a means of putting the principles into practice. Preliminary training for investigation is combined in this course, with the acquisition of desirable statistical information on practical questions of the day. The student is instructed in the bibliography of the subject, taught how to collect his data, and expected to weigh carefully the evidence on both sides of a mooted question. The work of writing theses is so adjusted that it corresponds to the work of other courses counting for the same number of hours.

Mj. Autumn Quarter; 12:00.
Professor Laughlin.

  1. The Theory and History of Banking. — A study is made of the banking systems of leading nations; the relations of the banks to the public; their influence on speculation; and the relative advantages of national banks, state banks, trust companies, and savings banks.

Mj. Winter Quarter; 8:30.
Mr. ———.

  1. Advanced Course in Money. — After having been drilled in the general principles of money (Course 50) the student is given an opportunity to examine the more difficult problems of money and credit.

Mj. Spring Quarter.
Professor Laughlin.

[Not given in 1904-5.1

  1. Practical Banking. — The internal organization and administration of a bank; the granting of loans; the valuation of an account; bank records; arithmetic of bank operations; mechanical and other time-saving devices.

Mj. Spring Quarter; 8:30.
Mr. ———.

  1. Commercial Crises. — A practical study of the operations of credit in the experiences of this and other countries during the periods of crises.

Mj. Spring Quarter.
Mr. ———.

[Not given in 1901-5.]

Group VI — Railways.
  1. Railway Transportation. — The economic, financial, and social influences arising from the growth of modern railway transportation, especially as concerns the United States, will be discussed. An account of the means of transportation developed in Europe and America during the early part of this century; the experiments of the states in constructing and operating canals and railways; national, state, and municipal aid to private companies; the rapid and irregular extension of the United States railway system; the failures of 1893; the reorganizations and consolidations since that time, with some attention to railway building in other countries, will form the historical part of the work. A discussion of competition, combination, discrimination, investments, speculation, abuse of fiduciary powers; state legislation and commissions, and the Inter-State Commerce Act, with decisions under it; and the various relations of the state, the public, the investors, the managers and the employés, will form the most important part of the work. This course gives a general view of the subject. Students who wish to continue the work by investigating special problems will have an opportunity to do so under Courses 61 and 62.

Mj. Autumn Quarter; 2:00
Assistant Professor Hill.

  1. The Regulation of Railway Rates. — The efforts of the railways of the United States to regulate railway rates through pools, will be compared with the efforts of the several states, and of the federal government, to regulate rates through legislation and through commissions. Typical decisions of pools, of state commissions, and of the Interstate Commerce Commission, will be studied for the purpose of ascertaining: (a) whether the decisions of the commissions are founded on a body of principles that may be said to have the character of a science, or, whether they express merely the judgment of administrative officers on questions of fact to which no body of scientific principles can be made to apply; (b) whether the past experience warrants the faith that the public regulation of railway rates will leave the railways sufficiently unhampered to develop trade and industry; (c) whether regulation by public authority promises to achieve more substantial justice than regulation by pools. The experience of Germany, France, Austria-Hungary, and Russia with the public regulation of railway rates — exercised either by legislation or by public ownership — will be studied with reference to the effect of such regulation upon the elasticity of railway rates, and upon the ability of the railways to develop trade and industry. In this connection will be studied the part played respectively by the railways and by the waterways in the development of Germany, France, Austria-Hungary, and Russia. The study will show why the countries in question are obliged to have recourse to the waterways for services that, in the United States, are rendered by the railways.

Mj. Winter Quarter; 2:00.
Assistant Professor Meyer.

  1. Industrial Activities of the State in Europe. — This course reviews the efforts made in Great Britain to secure to the public a share in the profits to be made in those so-called public service industries that use the streets: water, gas, electric light, street-railways, and hydraulic power, or compressed air, power transmission. These efforts consist of the imposition of severe restrictions upon franchises, with the alternative of municipal ownership. The experience of Great Britain will be compared with that of the United States, under: (a) the practice of practically no restrictions upon the industries in question; (b) the Massachusetts practice of regulation by legislation which is enforced and supplemented by state commissions. As for Continental Europe, the course will cover the experience of Prussia, France, and Russia, in attempting to make the railway and public works budgets fit into the state budget. In this connection the inelasticity of state activity in Europe will be compared with the elasticity of private activity in the United States.

Mj. Winter Quarter; 3:00.
Assistant Professor Meyer.

  1. The Industrial Activities of the State in Australasia. — This course will cover the Australasian experience of the last forty years under a wide extension of the functions of the state. Although Australasia is a comparatively small country, the experience in question is more significant than might appear at first sight, for it is the experience of a homogeneous, English-speaking people. The course will cover the management of the state-railways; the administration of the public finances; the civil service; and the legislative regulation of the conditions of labor, such as the fixing of minimum wages, and the establishment of compulsory arbitration. Incidentally comparisons will be made with certain conditions and practices in Great Britain and France, for the purpose of showing how the extension of the functions of the state has made the politics of Australasia resemble, in many vital respects, the politics of France, rather than those of Great Britain.

Mj. Spring Quarter; 2:00.
Assistant Professor Meyer.

  1. American Competition in Europe since 1873. — This course is a study in economics and politics; it purposes to put before the student information equipping him for the critical consideration of the merits of the question: Laissez faire vs. state intervention. To that end it institutes a series of comparisons between the United States and Europe, especially in the fields of agricultural practice and railway transportation. The course begins with the consideration of the nature of the competition to which the opening of new sources of supply of food products exposed Western Europe, the nature of the adjustments demanded by the situation, and the adjustments actually achieved, under free-trade in Great Britain, and under protection on the Continent. The course then proceeds to contrast the comparative failure to develop the agricultural resources of Eastern Europe (the Danubian Provinces and Russia) and Siberia with the rapid development of the agricultural resources of the interior regions of the United States. In this connection will be studied the comparative efficiency of the railway systems of Europe and the United States, with especial reference to the effect of the public regulation of railway rates, either through state-ownership, or through legislative and administrative intervention. Incidental to the main investigation an array of facts will be presented bearing upon questions of economic theory: the growth of population and the raising of the standard of living; some of the principal factors that have determined the present scale of real wages in the several European countries; some instances of the working of natural selection; and the relative merits of large farms and small farms, or of extensive cultivation and intensive cultivation.

Mj. Spring Quarter; 3:00.
Assistant Professor Meyer.

Group VII — Statistics.
  1. Training Course in Statistics. — The object of this course is to train students in the practical use of statistical methods of investigation. Stress is laid upon work done by students themselves in collecting, tabulating, interpreting, and presenting statistics of different orders. Members of the class are also required to make close critical examinations of various publications of statistical nature with a view to determining the accuracy of data and the legitimacy of inferences drawn. Students engaged in any special work of investigation are encouraged to deal mainly with data relevant to their subjects. To others special topics are assigned. It is hoped that the course may prove useful to all students whose work, in whatever department it may lie, whether in history, sociology, or in other fields of study, is susceptible of statistical treatment.
    Courses 70 and 72 will be given in alternate years.

Mj. Autumn Quarter; 8:30.
Assistant Professor Cummings.

  1. Statistics of Wages in the Nineteenth Century. — In this course effort is made to determine what has been the actual movement of wages during the nineteenth century. An examination is undertaken of the more important statistical investigations of wage movements which have been made from time to time by economists, government bureaus, or other agencies, in specific industries; the object being to determine the extent to which the wage-earner has in general participated in the benefits of industrial progress and of the increased economic efficiency of labor and capital. The course is intended to be informational and descriptive in character, as well as to give training in the collection and tabulation of statistical data.

Mj. Winter Quarter; 12:00.
Assistant Professor Cummings.

  1. Demography. — Statistical methods are illustrated by studies in population data, comprising the construction of actuarial tables; determination of the economic value of populations; economic aspects of the data of criminality and pauperism; growth and migration of population in the United States as “labor force,” including statistics of the negro race. The development of official statistics of population, and the demographic work of government bureaus is taken up historically and critically. The object of the course is to give students training in handling population data as a basis of sociological and economic speculation, and to point out the bearing of such data and their importance in the historical development of economic theories.

Assistant Professor Cummings.

[Not to be given in 1904-5.]

Group VIII — The Seminars.

80, 81. Economic Seminar.

2Mj. Autumn and Winter Quarters.
Professor Laughlin.

Source: University of Chicago. Programme of the Departments of Political Economy, Political Science, History, Sociology and Anthropology, 1904-1905. Chicago: The University of Chicago Press, 1904. Transcription from a copy found in the Harvard University Archives, Division of History, Government, and Economics. Ph.D. exams and records of candidates, study plans, lists, etc. pre-1911-1942. Box 2, Unlabeled Folder.

Image Source: Technology Reading Room 2, Crerar Library (Marshall Field Annex). From the University of Chicago Photographic Archive, apf2-01949, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Funny Business

Chicago. Economics skit based on Shakespeare’s Julius Caesar. Friedland, Niskanen, Oi. Ca. 1960-61

 

Future generations of economics graduate students and junior faculty, having been raised in a world of TikTok and able to bring the tools of sound and image processing to their media productions, will probably find the following sixty-some year old Chicago economics skit dull reading. Even the curator of Economics in the Rear-view Mirror, a veteran of this art-form from M.I.T. in the mid-1970s [cf. Analysis in Wonderland, Wizard of E-52-383cCasablank], finds this Chicago artifact in need of a major revise-and-resubmit. But we transcribe our artifacts as we find them, with minor editorial revisions to improve formatting, corrections for obvious misspellings, and annotations that have become necessary due to the passage of time. Material in square brackets (in italics) have been added to the transcription.

For those who wish to compare the skit with the text of Julius Caesar by Shakespeare

_____________________

About the authors

Claire E. Friedland

1929. Born 20 November in New York City.
1951. B.A. Queens College, City University of New York. Phi Beta Kappa.
1955. M.A. University of Chicago.
1957-59. Statistical analyst, Federal Reserve Bank of Chicago.
1959-71. Research Economist, University of Chicago (research assistant to George Stigler).

See: Chicago’s Hidden Figure: A Chat with Claire Friedland on her Work with George StiglerPromarket (website), November 22, 2017.

William A. Niskanen

1933. Born 13 March in Bend Oregon.
1954. A.B. Harvard University.
1955. M.A. University of Chicago.
1962. Ph.D. University of Chicago. Thesis: The Demand for Alcoholic Beverages.
1957-61. Defense policy analyst at RAND.
1962-64. Director of special studies in the Office of the Secretary of Defense.
1964-70. Director of Program Analysis Division at the Institute for Defense Analyses.
1970-1972. Assistant director for evaluation of the Office of Management and Budget.
1972-75. Professor of economics at the University of California, Berkeley.
1975-80. Chief economist of Ford Motor Company.
1980-81. Professor in the Graduate School of Management, UCLA
1981-85. Member of the Council of Economic Advisers.
1985-2008. Chairman of the board of directors, Cato Institute.
2008-11.  Chairman emeritus, Cato Institute.
2011. Died October 26 in Washington, D.C.

See: William A. Niskanen, A Life Well Lived (Cato Institute, 2012). Above screen-shot is from that memorial presentation.

Walter Yasuo Oi

1952 UCLA Yearbook Portrait

1929. Born July 1 in Los Angeles, CA.
1952. B.S. UCLA.
1954. M.A. UCLA.
1958-62. Research Economist, Northwestern University.
1961. Ph.D. University of Chicago. Thesis: Labor as a Quasi-Fixed Factor of Production.
1962-67. University of Washington
1967-. Professor, Graduate School of Management, University of Rochester.
1993. Elected a Fellow of the American Academy of Arts and Sciences.
1995. Named Distinguished Fellow of the American Economic Association.
2000. Received the Secretary of Defense Medal for Outstanding Public Service.
2013. Died December 24 in Brighton, N.Y.

Image Source: University of California Los Angeles. Yearbook Southern Campus, 1952, p. 176.

_____________________

[Opening] Song to the tune of
Jamaican Farewell“.

Prelims are done,

‘Tis a night for fun,

Don’t let worries

upset your equilibrium.

The faculty’s here,

They’re drinkin’ the beer,

The price of the liquor

For them is too dear.

On our play

We’ll soon raise up the curtain

You may judge it

true false or uncertain
[Note: a good chunk of the canonical prelim exam at Chicago featured questions having this format: example ]

Ficticious characters are in this scene

They bear no resemblance to Human bein’s.

Let the liquor flow

get on with the show,

Don’t let the faculty get out the door

They want to go home

to their little babes

To see if they’ve finished

with the prelim. grades.

_____________________

BRAVE OLD WORLD

A Tragic Comedy in Three Acts by the Adam Smithsonian Players.

by
Clare [sic] E. Friedland, William A. Niskanen,
& Walter Y. Oi

Cast of Characters:

Julius Freemarket [Milton Friedman]: Popular leader of Marshallia and Head of the Ministry of Money.

Capt. Marc Caganthony [Phillip Cagan]: Freemarket’s first lieutenant and pilot of the plane.

Llaius Mysticus: [The initials happen to match Lloyd Metzler. The double “Ll” is the give-away.] A soothsayer, and prophet of things to come.

Gregaryous Wrecker [Gary Becker]: A dope peddler.

A. Sovereign Consumer [Representative Graduate Student]: Exerciser of the right of free choice and beneficiary of the fruits of capitalism.

Carlos Cassius [Perhaps a reference to Carl F. Christ?]: Proprietor of the “Do it Yourself, Ph.D. Components” shop. A leading citizen of the community.

H. Greggo Brutus [H. Gregg Lewis]: Seller of Ph.D.’s New and Used, also a leading member of the business community.

G. Dale Jolly [D. Gale Johnson]: The Key Resource Person of the Ministry of Money.

Sancho Humbugger: Former brainchild of the Chicagocrats. [probably played by Marto A. Ballesteros, Chicago Ph.D. 1957].

Act I: Bliss

Narrator: The scene takes place in the brave old world of 1894 — or some permutation thereof.

If this scene seems utopian, a slight word of explanation may be in order.

In an attempt to conform to the justice and impartiality of the marketplace, a new electoral system has been inaugurated, according to which one dollar equals one vote. Thus, the Chicagocrats (with the aid of John D. [Rockefeller] & sundry other foundations) have become the majority party and a new regime has been established based upon the principle of free enterprise, in which Julius Freemarket has become the popular leader of the entire stationary state of Marshallia. All artificial market restrictions and evidences of paternalism, such as child labor laws, pure food and drug acts and compulsory sewage disposal, have been abolished; and in response to price incentives of the purest kind, we find many new industries flourishing in the marketplace.

The scene opens as we find Julius Freemarket, together with his trusted lieutenant Marc Caganthony, taking their morning constitutional — as all important people must — observing the well oiled functioning of the competitive mechanism.

_______________

Enter Freemarket and Caganthony

_______________

Free: Isn’t it wonderful that all is in static equilibrium?

Cagant: Yes, it certainly is.

Free: Except, of course, those things which are in moving equilibrium.

Cagant: Yes, of course.

_______________

Enter soothsayer, Llaius Mysticus

_______________

Llaius: Julius! Julius!

Free: Ha! Who calls? I hear a tongue shriller than all music calling “Julius!”. Speak, Freemarket is turned to hear.

_______________

Llaius comes up to Freemarket and tugs at sleeve.

_______________

Llaius: Beware the Ides of March.

_______________

Freemarket, turning to Caganthony

_______________

Free: What man is that?

Cagant: A soothsayer bids you beware the Ides of March.

Free: It is only Llaius Mysticus. He is a dreamer, a dreary prophet of gloom and doom. He has no empirical basis for his prophesies. Let us leave him and visit with Gregaryous Wrecker.

_______________

Enter Gregaryous Wrecker, singing “I’m an Old Dope Peddler”
[Tom Lehrer song (1953), Lyrics, Performance]

Upon completion of song, enter A. Sovereign Consumer (coded “Cons.”)

_______________

Cons.: (in hushed tone) Psst,…psst…hey buddy.

Free: Don’t be bashful young man. Just step right up there and tell the gentleman what you want. There’s nothing to be afraid of now. The dollar’s almighty.

Cons.: What’s today’s price on king-sized, filter tipped, Tiajuana marijuana?…Fresh ones.

Wreck: Current price is one dollar,… but March futures are fifty cents.

Cons.: Yeah? So high?

Wreck: Well, you see, the idea is this. We’ve got the phenonmener [sic] that the stuff has become a teenage fad, ever since the kids found out Alvis Regs-ley [Elvis Presley] is a user.

[Almost the same word “phenomener” appears in the Tom Lehrer song “Don’t Major in Physics”. Lyrics, Backstory.

…More often a king weds a commoner
Than a physicist makes a housewife,
For they only are versed in phenomener
⁠That have nothing to do with real life.

….

I like physics and my girl does not.
I tried showing her my apparatus,
But a blank smile was all that I got.
She asked me why I was in Physics,
⁠And advised me to transfer to Ec,
And whenever I tried to talk Physics,
All she wanted to do was to neck! ]

Cons.: You got anything cheaper?

Wreck: Well, advertised brands, like Tiajuana Marijuana sell for a few cents more than cheaper substitutes, but they’re worth it for the prestige.

Cons.: Prestige hell! I’ll have plenty of that when I get my Ph.D. Give me the cheap one.

_______________

Exit, Gregaryous Wrecker, as A. Sovereign Consumer moves from that booth to the booth of Carlos Cassius who is found on the telephone.

_______________

Cass.: “Do it Yourself, Ph.D. Components”, … Carlos Cassius speaking. Well, I’ve got simple and multiple regressions, higher r-squares are a bit more expensive. I’ve got a sale on permanent and transitory variables (in an aside to audience) I stole these out of Speedy Read’s [“speed reading” is implicit, one may suppose. The gendered pronoun makes it clear that Margaret Reid was being referred to] wastebasket when she wasn’t looking——— Oh! You’re at Haskell High. [Perhaps a reference to “Haskell Hall”?] Well then, I’ve got some spurious correlations here, ——— very cheap———I lose money on every one of these, but I make it up in the volume. … No, we can’t guaranty that you’ll pass your thesis seminar with these. (pause) Alright, thank you very much for calling. (turns to consumer). What can I do for you?

Cons.: Wow! I see you got a new jomping [sic] point. I’ll take it.

Cass.: Well, that ought to just about complete your set.

_______________

A. Sovereign Consumer moves away from Cassius’s desk to that of H. Greggo Brutus, who is found on the telephone.

_______________

Brutus: This is Greggo Brutus speaking … “Labor Exchange, Ph.D.’s new and used”.

Well, I’ve got a Ph.D. in physics for $2,000, and one in economics from Cambridge for $3,000. (pause) What? … you’ve got only $350? Well, the best I can do for you then, is a Masters degree in planning. (pause) Very fine, I’ll have Mrs. Jones send it out to you first thing in the morning.

(in an aside to audience) Great Jupiter! Here comes another one of those Israelis. Every time I sell one of them a degree, I begin to worry about my job. [Possibly a reference to Zvi Griliches (Ph.D., 1957)?]

(to consumer) Good morning.

Cons.: I want to buy a Chicago Ph.D.

Brutus: I have one here that I’m selling for a customer named Frank Fright, [Frank Knight] who’s decided to give it up and go into Hindu Philosophy. It’s a little old, but I can throw in his endowed chair, and 400 of his reprints, at a price that’s a bargain for the set.

Cons.: A tie in sale? You’re nothing but a reactionary. … a throwback to the old regime. (As he walks off) Heretic! Subversive! Thief!

Brutus: (reflectively) Could it be possible, that I, H. Greggo Brutus have been throwing sand into the wheels of the competitive machine? Perhaps, I have erred ——— yes he is right. Oh those Israelis, they see through everything.

Act II — Scene I

Props: table, chair, blackboard, sign: “Freemarket Watches You”.

From George Orwell’s dystopian novel 1984, film version (1956)

Nar: So…, life in Marshallia goes merrily on its way.

Guided by the velvet glove of the invisible iron hand and watched by Freemarket’s careful eye, consumers happily go around computing their marginal utilities, and entrepreneurs are rocking happily in the cradle of competitive equilibrium.

Freemarket has preserved only one authority from the government of the decadent Past — the Ministry of Money. This Ministry is really quite harmless, as its activities are entirely financed out of the secular rate of growth of the money supply. As the only equipment of the Authority consists of a printing press and an airplane [by the end of the 1960s Friedman’s metaphor had morphed into one using helicopters], the costs are in any case quite meagre.

We now visit the Headquarters (and sole office) of the Ministry in a tower at Halfway Airport [“Midway” was the actual name of Chicago’s airport], to see Freemarket’s weekly meeting with his Key Resource Person, G. Dale Jolly, Time: Morning, March 1.

Free: Everything in equilibrium today as usual, Jolly?

Jolly: (Laughs) I have a catastrophe to report, sir.

Free: Catastrophe? Impossible! We’ve purged all the reactionary elements, smoothed all the frictions, removed all the controls, dissolved the rigidities, exiled all the labor organizers, and turned Harvard Yard [Note: the “competition” in Cambridge Mass was still Harvard and not M.I.T.] into a parking lot.

Jolly: It’s the price index, Freemarket; remember, you told me never to take my eyes off the price index.

Free: Of course; this is the variable we chose to stabilize as a guide to our monetary policy. (aside) See my JPE article of 1951, reprinted in my Essays in Negative Economics [reference to Friedman’s “Essays in Positive Economics” (1953)], only $5.75, at the bookstore.

Jolly: See for yourself: The Multivac [a fictional supercomputer that was to appear in over a dozen Isaac Asimov science fiction stories] shows that wholesale prices have dropped 20 points in the last week.

Free: A random-transitory-stochastic type shock, no doubt. Nothing to worry about. What is the money supply, Jolly?

Jolly: (Laughing) I think I lost the series, sir. It was either lost or stolen; in this section of Chicago you can’t be sure which.

Free: You lost the whole series?

Jolly: Not all of it. Some of the data is…

Free: (Quickly) You mean “data are

Jolly: Data is, are, (we didn’t use such fancy language down on the farm), not all missing.

Free: This poses a serious problem. Capt. Caganthony, what do the rules state for this situation?

Cagant: (typically thumbing through phone book) Rule 412, Section A2 states that 80,000 assorted $10, $20, and $50 bills be dropped in a Latin Square design [see the Wikipedia article, probably application in statistics] over each city of over one million population.

Jolly: (Leaving) I won’t rest until I find the lost money data, sir. (Exit)

Free: Marc, the loss of that money series is quite serious, but I trust Jolly.

Let me have men about me that are fat;
Sleek-headed men and such as sleep of nights,
Blond Cassius, for example, has a lean and hungry look.
He thinks too much: such men are dangerous.

Cagant: Fear Cassius not, Freemarket, he’s not dangerous.

Free: Would he were fatter.

Such men as he be never at hear’ts [sic] ease
While they behold models better than their own.

Cagant: But the rules, the rules!

Free: Oh yes, the rules. Your watch should read 0800, Capt. Caganthony. Release the money over Chicago at exactly 0900 hours and over the other specified cities at subsequent 3-hour intervals.

Cagant: Roger, and off. (Exits, runs askew, whirring like a plane.)

_______________

Sound effects: Wagner’s Ride of the Valkyries.

_______________

Act II — Scene 2

Props: Table, chair, candle lit on table.

Nar: Let your eyes now adjust to the darkness of a cellar at the home of H. Greggo Brutus. The time, the evening of March 14.

_______________

On stage, Brutus. Enter Cassius.

_______________

Brut: How now Cassius. How goes the night?

Cass: (Shaking money from his coat) Did I go thru a tempest dropping money? This disturbed sky is not to walk in. But worst of all, paper has risen so high in price, due to this mad money-printing that I am forced to run my correlations on the backs of twenty dollar bills.

Brut: This glut of currency is slowing the chariots on the streets. Jolly reports it is smothering the crops. Who knows what adverse expectations it may cause in the marketplace.

Cass: All was prosperous until the ministry of money was moved to action. And now prices fall all the more as each new planeload of manna falls. It is as though the fundamental equation might contain some fundamental flaw.

Brut: Speak not such heresy in my house Cassius. Freemarket is a true and noble Marshallian. Did he not refuse the title of Supreme Bureaucrat when it was offered him by Cagananthony? I am certain he will be swayed from this policy when Jolly finds the lost money series and he sees the extreme to which he has gone.

Cass: Why must he sit in his airport tower and wait upon the money series? Is the error of his ways not obvious to every Marshallian who but looks about him? Brutus, think not that Freemarket is above the weaknesses of ordinary men. Did I not swim with him in the Tiber the other day and see him nearly carried away by the foam? So it is with this new power with which he seems drunk. Has not our noble sage, Frank Fright [Knight], warned us that “Power corrupts and absolute power corrupts, absolutely”? [Knight clearly was quoting Lord Acton (1889)]

Brut: There is truth in what you say. Freemarket promised us an economy free of all government interference. (Did he not condemn Adam Smith for suggesting that a state might build roads and schools and provide for the common defense?) Yet he insisted on this one ministry which would harmlessly follow a set of prescribed rules. And now he blindly follows his model and his rules, we know not where. Perhaps he has started us on the dreaded Road to Serfdom. [Homage à Hayek (1944)]

Cass: Then you are with us Brutus. I have moved already some of the noblest-minded Marshallians to undergo with me a plan. But there is none among us who is schooled in planning anymore.

Brut: Wait? …approach Sancho Humbugger, the brain-child of the Chicagocrats before Freemarket’s victory! He was suspected of deviationist tendencies and exiled to some southern outpost.

_______________

Enter Sancho, to Latin tune, wearing a huge sombrero and serape.

_______________

Sanche: Ole! (with wide sweep of hand)

Cass: Sancho! You’ve been away too long. Was it hot down there?

San: No, Chile.

Brut: Time enough later for such nonsense. Sancho, how do you happen to be in Marshallia?

San: Well, I was on this luxury airliner, see, when I starts up a conversation with this dame sitting next to me see. It seems she’s a white sox fan like me, see. (She wuz wit some slob who just made a killing selling cheap paper to the Marshallian Ministry of Money.) And she tells me how going from Professor to Bureaucrat was too much for Freemarket, and so he’s dropping this dough like mad. So I thought I’d take a hop to Marshallia and see if I could do something to help maybe.

Cass: Sancho, you must construct a plan for us to restore the price index to its former level, by any devious means, even (ugh?) Public Works, so as to stop the exercise of Freemarket’s excessive power with (Stage whisper) countervailing power.
[Clear reference to Galbraith’s American Capitalism: The Theory of Countervailing power (1952)]
Our whole way of life rests on your shoulders, Sancho.

San: You need a plan eh? I get the picture. Let’s see now.
(Paces nervously, mumbling, grabs for pencil & paper, scribbles furiously.)
I’ve got it! This is our action! We’re home!

_______________

All join in huddle.

_______________

Brut: (emerging) Do so; and let no man abide this deed but we the doers.

Act II — Scene III

Props: telephone, table, chair, sign (askew)

Nar: More men than these are disturbed on this troubled eve.

Free: (Alone, tired, slowly walking the room.)

Nor heaven, nor earth have been at peace tonight. That phone has screamed at each hour of the clock. (phone rings)
Jolly? What? The second derivative of prices is now falling? Oh, well, I’ll merely follow rule 205 next. Go bid the Multivac do present calculate and bring me its clanking opinion of success.
(picks up phone again.)
Capto Caganthony? He’s asleep? (With amazement and anger.) Give him this urgent message: “Another plane.” No, that’s all. He’ll know what to do.

Act III — Scene I

Props: Desk, chair, sign, blackboard.

Nar: The ides of March are come…but not gone. And, as we shall see, the events of the early day are false portent of the fate which for Freemarket lay.

_______________

Freemarket sits at desk, chin in hands, brooding.
Capt. Caganthony is at stage left and rear. Enter Jolly, whistling “Whistle as you work”. [From the Disney Film “Snow White and the Seven Dwarfs” (1937)]

_______________

Jolly: Tra, la, la, la, la, la, la (Whistles again.)

Free: Jolly, this is no time for glee; look, now my hair has started to fall out. [merely gratuitous bald-shaming of Friedman]

Jolly: (Laughing) But I’ve found it! Under my tractor seat cushion!

Free: My hair?

Jolly: No, that’s been gone too long. I found the lost money data.

Free: Thank Jupiter. Oh, Jolly, I could kiss you. Now all our troubles are over.  Did you hear that, Marc, he’s found it. I knew I could trust you, Jolly.

Cagant: Now all our troubles are over. (In a monotone)

Free: (To Jolly) Tell me, did you put the data through the Multivac?

Jolly: Yes I did. But there are some strange results. (Laughing) Prices are still falling in all the cities on which money was dropped. But there has been a phenomenal reflation in the backward river valleys of the South and West.

Free: Are you certain?

Jolly: Yes, if my assumptions are true.

Free: That’s irrelevant. Just the facts, Jolly, just the facts. [Probably an indirect homage à Sgt. Joe Friday from the then popular radio/TV series Dragnet]

Jolly: (Laughing) Of course, Freemarket, Just the facts. There are disturbing signs that the permanent component of the income of farm laborers has increased substantially.

Free: Impossible, my book is not published yet. Those cotton pickers will be buying Ph.D.’s next. (To Cagant) Marc, are you sure you dropped the money only in large metropolitan areas?

Cagant: (Monotone) Your instructions were carried out explicitly, so help me Mints. [Friedman’s old Chicago teacher in money matters, Lloyd Mints]

Free: (To himself, disturbed) The money must have been dropped in the wrong place. Marc, when was your last eye check?

Cagant: Why, when I worked for the National Bureau.

Free: That explains it, they hire anybody. Come, Marc, sit here.

_______________

Cagant is blindfolded, turned away from blackboard toward audience.

_______________

Free: Now, as I write these symbols on the board, read them back to me. [as if reading a chart in an eye examination]

Cagant: Delta, Gamma, Beta, Alpha (Freemarket smiles), X, G, M=KPZ. (Freemarket actually writes M=KPY)

Free: Z? (Angrily) Not Z…Y!

Cagant: Why? [punning on “Y” and “Why” sounding alike] I don’t know. I saw Z as in Z. I said, Zed. [perhaps just a silly rhyme “said”/“Zed”]

Free: (Calmly) Don’t repeat yourself, Marc. Let’s go over this last line again.

Cagant: M= KPZ

Free: Now, Marc, you don’t really want to go back to the National Bureau, do you? You know what these symbols are.

Cagant: You look at Y, I look at Z. Utility preferences differ, you know.

Free: (In a rage) This is a matter of doctrine, not of consumer choice!

Cagant: (Angrily) Under the new free-market system, this is a matter to be settled in the market place, not by a government decree.

_______________

Cagan [sic] stalks out agrily.

_______________

Free: (Upset) Jolly, the fundamental Truth of the Fundamental Equation has been questioned Call the Chamber of Chaos into session — I need reassurance.

Jolly: Stand firm, Freemarket these men are fallible; (in a shocked tone) they could even utter a non-sequitur! (Exit)

_______________

Enter Cassius, Brutus, and Humbugger

_______________

All except Free: Hail, Freemarket, Hail. You called for us?

Free: Yes, come in, Cassius, come in, noble Brutus. Ah, worthy Humbugger is with you. Good. Let me put our problem in my own terms.

Sancho: (Aside to Cassius and Brutus) Our cause is dead if he does.

Cass: (Quickly) No, glorious Freemarket, we know the problem and we know its cause. Pray hear friend Sancho speak for us.

San: Witness, noble Freemarket, how, with these quick strokes, if

(Writing on blackboard, allowing audience to see)

I = I*
G = G*
C = a + bY
and
Y = C+ I + G
then we’re home!

Free: Great Jupiter, is this the Keynes’ mutiny [punning Herman Wouk’s novel The Caine Mutiny (1952)]? This is heresy!

San:     Heresy or no,

We have this to show,
Prices still fall in Chicago.
But in the West and South, on my advice,
Migrant workers have picked up quite a slice
Of permanent income; the rest don’t rhyme so nice.

Free: (Sharply) Doesn’t rhyme as nicely. Your grammar is abominable, Sancho.

San:     By organizing unions to boost their wages,

By building dams to water their crops,
Income increased first by stages,
And then by leaps, and bounds, and hops.

Free: (in fury) Damn! Damn! Damn!

San:     Yes Freemarket.

It is Dams we built this day.
And thru these public works disaster did allay.

Free:    I must warn thee, Sancho.

These symbols and your reasoning
Might fire the blood of ordinary men,
And turn pre-ordinance and first decree
into the law of children.

(Sternly)

Thy model, and thyself, by decree, are banished.
Know all, Freemarket doth not wrong, nor
without cause will he be satisfied.

Cass: I, Cassius, do beg enfranchisement of Sancho’s model.

Free:

I could be well moved if I were as you.
If I could pray to move, prayers would move me.
But I am as constant as velocity

(Becoming emotional)

Of whose true fixed and resting quality
There is no variable in the literature.
Cassius, stand you with Humbugger?

_______________

Cassius walks in front of Freemarket to stand beside Sancho, and remains silent.

_______________

Free:    (Disturbed)

Good Brutus, when all is said and done
Stand you with models with equations four,
Or with the Fundamental One?

_______________

Brutus silently joins Cassius and Sancho.

 _______________

Et tu, Brute! Then die, Freemarket, die!

_______________

Freemarket clutches at sign, pulls it down, and collapses on table.
The whole cast gathers around the table on which Freemarket lies, as an audience for the following speech:

_______________

Cagant:

Friends, Marshallians, Chicagocrats, lend me your ears.
I come to bury Freemarket, not to praise him.
The models that men build live after them,
Their meaning oft interred in their books.
So let it be with Freemarket.

All (including MAB): [almost certainly, Marto A. Ballesteros]

How many ages hence
Shall this our lofty scene be acted o’er
In states unborn and accents yet unknown.

Source: Harvard University Archives. Papers of Zvi Griliches, Box 129, Folder “Faculty skits, ca. 1960s.

Image Sources: The Tusculum portrait, possibly the only surviving sculpture of Caesar made during his lifetime, now housed at the Archaeological Museum in  Turin, Italy.
Milton Friedman portrait: Hoover Institution.

_______________

Note on Marto A. Ballesteros identification for “MAB”

Fellow 1957—Asst Prof. 1960 at the University of Chicago according to the 1969 AEA Directory of Members.

Publications

Argentine Agriculture, 1908-1954: A Study in Growth and Decline By Marto A. Ballesteros (University of Chicago, 1958). (PhD thesis)

Ballesteros, Marto A. Desarrollo agrícola chileno, 1910-1955. Santiago: Pontificia Universidad Católica de Chile, Facultad de Ciencias Económicas y Sociales,1965. p. 7-40.

Newspaper Accounts

The Peninsula Times Tribune (13 Sep 1957). Marriage to Jill Sidnell Geer of Los Altos. Off to Chile to live for one year. His parents are from Madrid, his undergraduate studies were at the University of Madrid, MA and PhD at the University of Chicago. Just received his doctorate in economics from the University of Chicago, Junior fellow at the Center for Advanced Study in the Behavioral Sciences for a year  1956-57.

The Galion Inquirer (23 Sep 1957) that “[Balesteros] will be doing research and teaching in economics at the Universidad Catolica de Chile, Centro De Investigaciones Economicas, Santiago, Chile, under sponsorship of the University of Chicago and the International Cooperation Administration of the U.S. Government”.

Miami Herald (8 Apr 1965), “Dr. Marto Ballesteros, chief of the Pan American Union’s public finance unit”.

Categories
Chicago Exam Questions Theory

Chicago. First quarter price theory exams. Rees, 1960

Happy to add another round of first quarter price theory exams from the University of Chicago to the collection. Always nice to have a picture from the early professional years of the economists featured here. Distinguished old farts were once rising stars after all. (A general wisecrack made with the qualification, “present company excluded”.)

______________________

Posted earlier

Reading list and exams from the Autumn quarter of 1962.

______________________

Economics 300
Mr. Albert Rees

Midterm Examination
Autumn 1960

  1. (16 points) State whether each of the following statements about the U. S. economy is true, false, or uncertain, and explain your answers briefly.
    1. Consumers decide what will be produced.
    2. All consumers participate equally in determining what will be produced.
    3. The government influences the composition of output in the private consumer goods sector.
    4. The government determines the level of investment for the economy as a whole.
  1. (10 points) Comment briefly on the following statement:
    “When equilibrium prices in competitive markets are disturbed, they tend to be re-established. Thus the first effect of an increased supply of eggs is to lower the price. At this lower price, consumption is increased, and the increase in demand tends to drive the price back up again.”
  2. (16 points) Increased costs cause manufacturers to reduce the size of 5 cent chocolate bars from 2-1/2 ounces to 2 ounces. Because the bars are smaller, people eat more of them and consumption rises from 10, 000 bars a week to 11,000.
    1. Can these events be shown on an ordinary supply and demand diagram? If so, show them. If not, explain why.
    2. Can the elasticity of demand for chocolate be computed? If so, compute it. If not, explain.
  1. (24 Points) The following table gives hypothetical prices of pork and beef per pound in two years, and quantities consumed in a certain town.

Price per pound Pounds consumed
1959 1960 1959

1960

Pork

40 cents 50 cents 1000 800
Beef 60 cents 60 cents 1000

1200

    1. Compute the elasticity of demand for pork and the cross-elasticity of demand for beef in terms of the price of pork.
    2. Compute the Laspeyres price index for the price of meat from 1959 to 1960 (assuming that pork and beef are the only kinds of meat).
    3. Draw an indifference map for pork and beef for a typical consumer and illustrate the changes shown in the table on his indifference map. Derive two points on his demand curve for pork.
    4. Assume that the consumer’s money income is increased by an amount equal to his original income times the Laspeyres price index computed in (b). Demonstrate that he has been overcompensated for the price rise. Under what condition if any would this increase in income fail to overcompensate him?
  1. (16 points) Jones lives in a rented house for which he pays $150 a month. He has the opportunity of buying an identical house for $25,000, of which $15,000 will be paid in cash and $10,000 can be borrowed on a mortgage. He has figured that his monthly expenses would be $100 if he bought: $50 for interest on the mortgage, $20 for local taxes, and $30 for maintenance and depreciation. His income tax and expenses for fuel and utilities will not be affected by the purchase. He argues that it will cost him less to live if he buy the house; his wife argues that it will not.
    1. Under what conditions is Jones right? Under what conditions is Mrs. Jones right?
    2. Is there any divergence between the “right answer” to this problem from the private standpoint of the Jones family and from the standpoint of society? Explain.
  1. (18 points) The GJS corporation, manufacturers of gadgets, have determined that for every 10 per cent increase in the capacity of a gadget factory, minimum short-run average total cost falls by 1 per cent throughout the relevant range of capacities.
    1. What can you say about the production function for gadgets over the relevant range?
    2. Suppose that the company hires two factors of production, labor and capital, and pays each its marginal product. Will anything be left over for the owners of the company who contribute no services? Explain.
    3. Suppose that the company wants to build a plant to produce 10,000 gadget per week. What can you say about the size of the plant that will produce these most efficiently?

Economics 300
Mr. Rees
Fall. 1960

Final Examination
December 14, 1960

  1. (21 points) Show each of the following events on an indifference map:
    1. The change in the consumption of margarine following an increase in income (axes: butter and margarine. Assume that the income elasticity of demand is positive for butter and negative for margarine.)
    2. The change in the consumption of bread following a rise in its price. (axes: bread and all other commodities.) Identify the income and substitution effects of the price change.
    3. Do part (b) over using Friedman’s “Marshallian demand curve” concept and explain the difference between the diagrams for (b) and (c).
  2. (19 points) In the United States, about one-fifth to one-fourth of all income is property income. State briefly (a) the advantages of having private income from property in our economy (b) the costs or disadvantages. You may judge these according to any values you care to use, making the values as explicit as possible.
  3. (20 points) In a certain isolated area there are 50 farms of each of two types, A farms and B farms (100 farms in all). Within each type, all farms are identical. All farms are worked by identical workers. The marginal product schedules of one farm of each type are given below, in bushels of wheat per year.

A Farm

B Farm

No. of workers

1 100

95

2

90 84
3 80

73

4

70 62
5 60

51

  1. If there are 260 workers in the area, how many will be employed on each kind of farm? What is the total product of each kind of farm? The rent of each kind of farm? The wages of workers on each type of farm in bushels per year? (Assume that farmers compete freely for labor, and labor can move within the area.)
  2. By means of an irrigation project, the owners of twenty B farms transform them into A farms. Recompute the answers to (a), counting the transformed farms as A farms. Who gained and who lost from the project, and why?
    1. (20 points) By means of appropriate diagrams and/or explanations, show the short-run effect of each of the following taxes on the output and profits of a monopolist.
    2. An excise tax of 10 cents per unit of product.
    3. An excise tax of 10 percent of the price of the product.
    4. A corporate profit tax equal to 50 percent of net profits.
  1. (20 points) The Edgeworth Box Company is the only employer in the town of Yarmouth. Its supply schedule of labor is given by W = 40 + 1/4 q, where W is the wage in cents per hour and q is the number of manhours supplied per week. The company sells boxes in a competitive market. The value of the marginal product of labor is given by
    V = 100 – 1/2 q for values of q greater than zero.
  2. How many man-hours of labor will the company employ, and at what wage?
  3. Show diagramatically for part (a) first, the wage bill and second, the sum of monopoly profits and the return to factors of production other than labor.
  4. What will be the effect on employment of a legal minimum wage of 60 cents an hour? of 80 cents an hour?

This problem may be solved algebraically or graphically. The following table gives numerically some points on the schedules whose equations are given above:

Supply

Marginal Product

q (Man-hours)

W (cents) q (man-hours) W (cents)
1 40.25 1

99.5

2

40.50 2 99.0
3 40.75 3

98.5

4

41.00 4 98.0
etc.

etc.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Albert Rees Papers, Box 1, Folder “Economics 300”.

Image Source: University of Chicago Photographic Archive, apf1-07002, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library. Colorized by Economics in the Rear-View Mirror.

Categories
Chicago Exam Questions

Chicago. First quarter of price theory. Midterm and final exams. Harberger, 1957

 

A copy of the reading list for the first quarter of price theory at the University of Chicago taught by Arnold Harberger in the autumn quarter of 1955 has been transcribed and posted earlier. That copy was found in Milton Friedman’s papers at the Hoover Institution Archives. Copies of the two mid-term exams and the final exam for the same course in 1957 were found in Zvi Griliches’ papers in the Harvard University Archives. While not a perfect match, some items might have been added/subtracted to the later course, price theory à la Harberger in the mid-1950sis better reflected in these two posts together now.

______________________________

Economics 300A
Hour Examination
November 5, 1957

(60 points)

  1. True, False, or Uncertain. In each case write a paragraph explaining your answer. Your grade will depend heavily on your explanation.
    1. The price elasticity of demand for a good will be higher, the higher is the income elasticity of demand for that good.
    2. If X and Y are substitutes, a decline in the price of X can lead to an increase in the amount of Y demanded only if Y is an inferior good.
    3. If a particular producer of grapefruit produces 10 percent of the total supply of grapefruit, the elasticity of demand facing that producer must be at least -10.
    4. If the cross-elasticity of demand for X with respect to the price of Y is .5, the cross elasticity of demand for Y with respect to the price of X will also be .5.
    5. The demand curve for a commodity which includes the “income effect” is necessarily more elastic than the demand curve for the same commodity which includes only the substitution effect.
    6. Food and “all other commodities” cannot be complements.

(15 points)

  1. Derive the expression for the elasticity of demand facing a particular producer in terms of the elasticity of “total demand” in the market and of the elasticity of “other supply”.

(25 points)

  1. Using indifference curves, derive the supply curve of labor as A function of real wages. Distinguish between the “income effect” and the substitution effect. State what, if any, will be the circumstances under which a rise in real wages will lead to a reduction in the quantity of labor offers.

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

Economics 300A
Hour Examination
4 December 1957
Mr. Harberger

(48 points)

  1. True, False or Uncertain. In each case write a few sentences explaining your answer.
    1. If the firms in the coal industry were to merge into one single firm, the demand curve for coal miners would become more elastic.
    2. Marginal cost exceeds average cost wherever marginal cost is rising.
    3. In the case in which factors combine in fixed proportions to produce a product X, the elasticity of demand in industry X for a factor will be greater, the larger is the fraction of the total costs of producing X which is spent on hiring the factor in question.
    4. A firm having monopsony power in the market for its labor will hire workers up to the point where their wage is equal to their marginal value product (marginal physical product times marginal revenue), not to the value of their marginal physical product.
    5. If, at a point in a homogeneous production function, the marginal product of A is rising, the marginal product of B will be negative. (Consider A and B as the only two factors.)
    6. If, at a point in a homogeneous production function, the marginal product of B is negative, the marginal product of A will be rising. (Consider A and B as the only two factors.)

(34 points)

  1. Discuss and comment on Marshall’s four rules of derived demand

(18 points)

  1. Discuss the relationship between short run and long run cost curves. Is a shorter run marginal cost curve always more elastic than a longer run marginal cost curve going through the same point on the long run average cost curve

 

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

Final Examination
Economics 300A
Autumn, 1957

(70 points)

  1. True, False, or Uncertain. In each case write a few sentences explaining your answer. Your grade will depend heavily on your explanation.
    1. If the United States exports one tenth of its coal, the elasticity of supply of domestic coal being unity, the elasticity of supply of U.S. coal exports must be at least 10.
    2. If the price of X rises while the price of X stays constant, the amount of Y demanded will always increase, so long as X and Y are substitutes. (Assume money income and other prices remain unchanged.)
    3. The own-price elasticity of demand for a commodity must always equal or exceed, in absolute value, the cross elasticity of demand for that commodity with respect to the price of any other commodity.
    4. The own-price elasticity of demand for a commodity must always equal or exceed, in absolute value, the marginal propensity to consume that commodity.
    5. When the production function is such that factors of production combine with each other in fixed proportions to produce a product, the own price elasticity of demand for the use of any of the factors in the production of the product must be less than the price elasticity of demand for the product. (Assume that the production of the product in question is competitive.)
    6. The income elasticity of demand for a commodity is the marginal propensity to consume that commodity divided by the average propensity to consume that commodity.
    7. The elasticity of demand for labor in the production of automobiles will be lower in the case in which the quantities of other factors are given than in the case in which the prices of other factors are taken as given.
    8. The elasticity of demand facing a monopolist will be lower than the elasticity of demand facing the same industry if it were competitive.
    9. The welfare cost of a 5 percent tax on automobiles is the same as the welfare cost of a 5 percent subsidy on all goods and services other than automobiles.
    10. The welfare cost per dollar of tax receipts of a 5 percent tax on automobiles is the same as the welfare cost per dollar of tax receipts of a 5 percent tax on all goods and services other than automobiles.
    11. If, at a point in a production function which is homogeneous (of degree 1), the marginal product of factor B is negative, the marginal product of factor A will be rising (in the sense that the marginal product of A will be higher when the proportion of factor A to factor B is slightly increased). Assume that A and B are the only two factors.
    12. The supply curve of labor can be backward bending only if leisure is an inferior good.
    13. The demand for the services of a factor of production in a particular industry will be more elastic, the larger is the share of that factor in the total costs of the industry in question.
    14. All short run average cost curves are tangent at (at least) one point to the long run average cost curve.

(15 points)

  1. Outline the economics of the fishing industry. What resemblance, if any, do you see between the economics of the fishing industry under conditions of competition and the economics of monopolistic competition.

(15 points)

  1. Indicate, using supply and demand diagrams, what is the welfare cost of a tariff. Assume that the tariff is on a product (woolen cloth) in which the domestic demand is partly met by domestic supplies and partly met by imports. The tariff, of course, is a tax only on the imports. Assume that the imported product and the domestic product are for all relevant purposes homogeneous. What role does the elasticity of domestic demand for woolen cloth play in your measure of welfare cost? The elasticity of domestic supply of woolen cloth? The ratio of domestic supply to domestic demand?

Source: Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Syllabi and exams, 1955-1959”.

Image Source: Arnold C. Harberger, 1957 Fellowship in Economics from the John Simon Guggenheim Memorial Foundation. Colorized by Economics in the Rear-View Mirror.

Categories
Chicago Exam Questions

Chicago. Final exam for Price Theory (B). Friedman. Winter quarter 1964

The spirit of Chicago’s boot-camp training in price theory with Milton Friedman as canonical drill  instructor is captured in the examination transcribed below. 

Trivial observation: Questions 9 through 11 are based on a fictional monopoly Gimcrack Company that appears to be a homage to the old song “Jim Crack Corn” (a.k.a. “Blue tail Fly”). One can imagine the American graduate students hearing the voice of the folk singer Burl Ives rendering the tune as they attempted to answer the questions.

*  *  *  *  *  *  *  *  *  *

Some other exams for the second quarter of graduate price theory at Chicago from this period have been previously posted:

December 16, 1959 (Friedman); December 1960 (Friedman?); February 10/March 15, 1965 (Griliches); December 1965 (Telser)

___________________________

ECONOMICS 301
FINAL EXAM — Winter, 1964

M. Friedman
March 19, 1964

I. [25 Points] Indicate whether each of the following statements is true (T), false (F), or uncertain (U) and state briefly (on this paper) the reason for your answer.

  1. The elasticity of a straight line demand curve varies from point to point.
  2. In the long run, demand has no influence on the price of the product of a competitive industry that uses no specialized resources.
  3. Marginal revenue is always greater than average revenue when average revenue is rising as quantity increases.

[4. and 5.] Assume that the government is going to purchase a predetermined quantity of rice for foreign relief and that it is considering making its purchases (a) directly from the growers of rice, or (b) through the regular dealer on the grain exchange. Assume also that there are no other governmental actions affecting rise growing or marketing.

  1. The price to the domestic consumer of rice that remains will be higher in case (a) than in case (b).
  2. The price received by the farmer for the rice that remains will be higher in case (a) than in case (b).
  1. An “inferior” good is one such that a larger quantity is demanded at a high than at a low price.
  2. If the quantity of Y increases and the quantity of X decreases in such a way as to keep total utility constant, then the rate of substitution of Y for X is independent of the quantity of X.
  3. The income of the farmers raising corn increases when the price of corn rises. The rise in income is the “income effect of the rise in price.”

[9., 10., 11.] The Gimcrack Company is a monopoly, selling in two distinct markets. Transportation costs between the two markets can be neglected.

  1. The company will always charge the same price for gimcracks in the two markets.
  2. The company will sell such quantities in the two markets as will make the elasticities of demand the same in the two markets.
  3. The company will sell such quantities in the two markets as will make marginal revenue the same in the two markets.

II. [25 Points] Fill in the blanks in the following questions.

  1. Consider three demand curves for commodity X: A for given money income and other prices; B, for given apparent real income in Slutsky’s sense; C, for given real income in Hick’s sense. Let all three curves go through the point (po , xo)
    If X is a superior good, then for a price lower than p0, the quantity demanded will be larger for_____ than for _____. (Insert A, B, C, in correct spaces.)
    If X is an inferior good, then for a price lower than p0, the quantity demanded will be larger for _____ than for _____.
    Suppose p0 = $5, X0 = $20, the corresponding money income $1, 000, and the income elasticity of demand for X is 2. Suppose that at a price $4, the quantity demanded on curve A is 25. Then the income compensation required to pass from A to B is $_____ (be sure to indicate sign of change) and the quantity demanded on curve B is _____.
  2. Blank is indifferent whether he wagers $1 at even-money that a coin he regards as fair will come up heads. He is eager to wager $1 against $3 (i.e., he pays $1 if he loses, receives $3 if he wins) that heads will come up twice in two successive throws of this coin. (He regards the throws as independent and so the chances of two successive heads as one in four.) Let the utility of his income if he loses $1 be 100; if he wins $1, 101. Then the utility to him of his present income can be taken to be _____ (insert a number); the utility to his present income plus $3 _____ (insert the most accurate statement the evidence permits).

III. [25 Points.] Find the mistakes (there are at least six) in the accompanying diagram showing long run and short run marginal and average cost curves for an individual firm, and explain the general principle corresponding to each particular mistake.

[NOTE: The answer to question III has been transcribed and posted with the Friedman’s December 16, 1959 exam for Economics 301.]

IV. [25 Points] Consider two alternative taxes imposed on a commodity: (a) a specific tax of T dollars per unit sold: (b) an ad valorem tax of t per cent of the price of the product.
Assume that the commodity is produced and sold under strictly competitive conditions and that the price inclusive of tax when the tax of T is imposed is P0. (i) Prove graphically that an ad valorem tax of t – T/P0will result in the same equilibrium price. (ii) Suppose a tax rate slightly greater than t – T/P0 is imposed. Under what conditions, if any, is it certain that the revenue will increase? (iii) Decrease?
Assume alternatively that the commodity is produced and sold by a monopoly. Suppose that, when a specific tax of T is imposed, the monopolist chose to sell at a price (inclusive of tax) of P1. Suppose now, an ad valorem tax of t – T/P1 is imposed. (iv) Will the monopolist’s optimum price be P1? If not, will it be higher? or lower? Prove your answer.

V. [20 Points] When someone offers a cigarette to pipe-puffing Surgeon General Luther Terry, he always grabs it. “Every one I accept I tear up,” he says. “That way there’s one less cigarette.” (Time, February 7, 1964).
Analyze the economics of the Surgeon General’s policy. In doing so, assume of course, that a substantial class of people with similar beliefs behave the same way, so the effect is at least potentially appreciable. Would it contribute to his objective of reducing smoking? If so, through what channels?

___________________________

PROBLEM
for
ECONOMICS 301
Winter Quarter, 1964

Analyze the business practice discussed in the accompanying excerpt from a Wall Street Journal story of December 4 1963.

Under what circumstances, if any would you expect such a practice to be in the self-interest of the participating companies? How would you suggest testing your explanation?

Source: Hoover Institution Archives. Milton Friedman Papers. Box 77. Folder: University of Chicago, Econ. 301.

Image Source: Detail from picture of Milton Friedman (November 1957) at the Center for Advanced Study in the Behavioral Sciences, Stanford. University of Chicago Photographic Archive, pf1-06234, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Alvin Johnson remembers Robert Hoxie and his relationship to Veblen, 1906-16.

 

Labor economist Robert Hoxie (1868-1916) taught at the University of Chicago from 1906 to 1916. From the autobiography of Alvin S. Johnson we learn that Hoxie’s suicide would probably have come as no surprise to someone who knew him at all well.

_____________________________

Alvin S. Johnson on his personal and professional friendship with Robert Hoxie

Of all the faculty I most enjoyed Robert Hoxie. He specialized in labor problems and had the enterprise to bring before his class all types of labor leaders, to state their aims and unfold their hopes. He had in unexampled degree the art to bring even the most stubborn-tongued labor leader to an adequate expression of his views.

Hoxie was square built and well poised, of ruddy complexion and bright eyes, well equipped with wit and humor, and, you’d have said, here, anyway, was a scholar well adjusted to life. But the fact was he was subject to terrible nervous crises. He imputed his condition to an attack of poliomyelitis in his childhood, which, while it did not cripple his limbs, impaired permanently his nervous structure. I questioned the validity of his explanation until I came to know him.

He was my good friend, and we saw a lot of each other. Whenever he could get free from his office he’d come to mine and insist that we go for a walk, even if the cold wind was blowing at forty miles an hour. However busy I was I would comply, for if I did not he would fall into a lamentable fit of depression, asserting that I no longer found him interesting.

When he was scheduled for a seminar paper I had a choice of unattractive alternatives. If I did not attend, he put this down as my judgment that he had nothing to say. If I attended, he felt sure that I detected all the points where the author of a seminar paper sidesteps difficulties.

Matters were simpler when we were alone together, on our walks or over the beer at the White City, where we could argue to the accompaniment of an orchestra playing with great éclat the scores of Traviata or Aïda. So far as I could, I kept away from contentious economic subjects.

One subject of contention would, however, inevitably intrude: Veblen. Hoxie loved Veblen with a love that passeth understanding. I admired Veblen’s genius, but Veblen and I could never get nearer each other than arm’s length. He regarded me as a plodding Dane; I regarded him as a romantic Norwegian. Whenever we found ourselves together in company we spoiled each other’s style. On occasion friends would urge me to remain away from a Veblen party, for Veblen never made himself interesting when I was around.

I considered Veblen good reading for the scholar who knew how to discriminate, but a singularly dangerous guide for anyone who followed him blindly. I asserted that Veblen’s Theory of the Leisure Class was really a satirical essay, with literary potency and scientific intent closely parallel to Carlyle’s Sartor Resartus. Both authors counted on the pleasure a reader gets out of judiciously worded insults to himself. Both liked to make use of the principle that two half-truths make a whole truth.

Such observations filled Hoxie with indignation, but pleasant indignation, for they proved to him that I fell far short of him in the understanding of the man he considered the greatest economist of all time. Hoxie boasted that his whole system of thought came from Veblen. It was Veblen who had taught him that all ideas of reconciling the interests of labor and the employer were a fantastic delusion. For the minds of labor and of the employer were built out of completely different philosophic elements. The philosophy the worker had hammered into him by his job ran in terms of cause and effect — the efficient cause. The employer thought in terms of values, purposes, final causes. As well try to mate a sheep with a tunny fish as try to bring efficient cause and final cause to an agreement.

I argued that this contrast was just a hocus-pocus. The employer, in considering the properties of a machine he is tempted to buy, or in considering how to cut the waste of material, is thinking in terms of cause and effect. The worker in demanding an enlarged take-home is thinking in terms of values.

I refused to concede that there are impermeable septa between the thinking of any two classes, indeed, between any two individuals. Business conceptions, labor conceptions, wander afield. Does one not encounter the divine who calculates on the “unit cost of saving souls”?

Years later Hoxie visited New York and asked me to come to his hotel for the evening. He was frightening in his appearance.

“Johnson,” he said, “I’m finished. I can see now, all my work has been bunk. All my writing, every lecture I have ever given, has been bunk.”

“What in heaven’s name has happened to you, Hoxie?”

“I’ve come to see through Veblen. You partly saw through him, but not the way I do.”

In an evening that extended until four in the morning — for I did not dare to leave him — Hoxie unfolded the rather inconsequential course of his deconversion from Veblen. They had disagreed on a personal matter and Veblen had treated Hoxie rudely. But Hoxie had always known that Veblen could glory in rudeness.

Such an incident could have been effective only as a catalyst. Hoxie had been working for months with Frey, a distinguished labor leader, on a book, Industrial Management and Labor. [sic, Scientific Management and Labor is the correct title] Undoubtedly he had been unconsciously accumulating cases that exhibited the shortcomings of Veblen’s theories.

“I got to thinking,” Hoxie said, “how could a man be so great a scientist and such a damn fool? And the more I thought, the more the idea rode my mind: how great a scientist is he? Johnson thought his science was phony.”

“No,” I said, “I never thought that. I thought you had to watch him. His equations didn’t solve, and he patched them up by rhetorical ‘by and large,’ for the most part.’ Almost all economists do something of the kind sometimes.”

“Veblen knew his equations didn’t solve, but he used them just the same. And his class dope; he pretended it was psychology. It was pure abstractions; no, not pure, but with a purpose.”

“We’re all purposive, Hoxie.”

“I wouldn’t care if it was just the matter of my finding out a phony I had taken for okay. But Veblen has been the premise of all my work. My work is all rotten with Veblenism.”

“Hoxie, I’ve read about everything you ever wrote. Your work stands on its own feet. Sometimes you’re wrong–not often.”

“Johnson, you know the basis of my labor theory. Two philosophies, the employer’s and the laborer’s. The first based on the final cause. the other on the efficient cause. You called that bunk the first time we met, when we were both on the American Economic Association program.”

“It is bunk,” I agreed. “But all that enormous amount of concrete investigation you have done is quite independent of any such premise. It stands.”

“No, it doesn’t. It’s all diseased, from that premise.”

I argued with Hoxie for eight hours at a stretch. Our positions were reversed, Hoxie was attacking Veblen, I was defending him. I marshaled as many telling and meaningful passages as I held in my memory, from Veblen’s Theory of Business Enterprise, Imperial Germany, The Engineers and the Price System, even from Veblen’s most sardonic and least sincere book, The Higher Learning. Finally Hoxie seemed to be calmed down enough, or wearied enough, for sleep. I left him, promising to visit him in Chicago and renew the discussion.

But before I could get around to a Chicago trip Hoxie killed himself.

Source: Alvin Saunders Johnson. A Pioneer’s Progress. New York: Viking Press, 1952. Pages pp. 204-207.

Image Source: University of Chicago Photographic Archive, apf1-02878, Special Collections Research Center, University of Chicago Library. Potrait colorized by Economics in the Rear-view Mirror.

Categories
Chicago Economist Market Salaries

Chicago. Suggestions to make University of Chicago professorships more attractive. Leland, 1945

 

On April 10, 1945, the chairman of the University of Chicago’s economics department, Professor Simeon E. Leland, submitted a 77 page (!) memorandum to President Robert M. Hutchins entitled “Postwar Plans of the Department of Economics – A Wide Variety of Observations and Suggestions All Intended To Be Helpful in Improving the State of the University”.

In his cover letter Leland wrote “…in the preparation of the memorandum, I learned much that was new about the past history of the Department. Some of this, incorporated in the memorandum, looks like filler stuck in, but I thought it ought to be included for historical reasons and to furnish some background for a few of the suggestions.” 

In earlier posts I have provided (1) a list of visiting professors who taught economics at the University of Chicago up through 1944 (excluding those visitors who were to receive permanent appointments); (2) supporting tables with enrollment trends and faculty data (ages and educational backgrounds); (3) three lists of names for economists who in 1945 could be taken into consideration for either permanent economics, joint appointments with other department or visiting appointments at the University of Chicago.

The excerpt transcribed for this post deals with the employment conditions and prospects of University of Chicago faculty. The basic message was that Chicago had lost its position as highest-bidder in the academic market and that relative attractiveness was a function of salary to be sure, but also other conditions (teaching loads, research support, clerical support, burden of special (extra) examinations, housing, medical benefits, etc.) should be improved as well.

Leland’s laundry list of suggestions seems pretty familiar to early 21st century academics. Would love to have an analogous memo for the present to see which additional items are now included.

_________________________

POSTWAR PLANS
OF THE
DEPARTMENT OF ECONOMICS

A Wide Variety of Observations and Suggestions
All Intended To Be Helpful
in Improving the State
of the
University

by Simeon E. Leland, Chairman
(on his own behalf and for the Department)

1945

[…]

Making University of Chicago Professorships More Attractive

The following suggestions are, in large part, the result of actual experiences in negotiating with “outsiders” over appointments to our faculty, or are reactions observed in dealing with present faculty members with respect to appointments or promotions within the Department. Some of them undoubtedly represent aspirations of the staff. They are offered, not as criticisms of present conditions, but as suggestions for improvements for realization in the future.

1. Distinguished Professorships

At the inception of the University, President Harper established a salary scale for full professors which was the highest in the country. He literally bought his faculty, outbidding all competitors for the services of distinguished men. The University of Chicago at once gained a reputation for the payment of attractive salaries. With the passage of time this situation has changed. Although the University of Chicago is still a “high-salary” institution, the emoluments it offers are by no means the most attractive in the United States.

The enhanced salaries paid (on an individual competitive bargaining arrangement) to present staff members on the 4E contracts render utterly inadequate the $10,000 salaries paid to the holders of University Distinguished Service Professorships. When these Professorships were established the salary differentials between the Distinguished Professorships and other professorships were quite large. They are far narrower today due to the liberal treatment by the University of the “ordinary” professors. Rising costs of living have also lowered the real wages paid to our Distinguished colleagues, and others as well.

If the Distinguished Professorships are to mean much to the holders over the years to come, the stipends should be increased; otherwise, the recognition bestowed will be rewarded only by a name or possibly by a degree of freedom not possessed by colleagues — both of which by that time may be empty honors. The times seem to call for $12,000 salaries as a minimum rather than $10,000 for these Professorships.

2. Divisional Professorships

If the Divisional Professorships, such as the Social Sciences Professorships, are to carry any real distinction they should be made to rank in terms of prestige and desirability next to the Distinguished Service Professorships. At present all they have to offer is some relief from fixed teaching (which is illusory for men with real scholarly interests who always talk about problems of their intellectual world with students) and the right to teach what they wish, irrespective of departmental lines. Both of these freedoms in greater or lesser degree are accorded every member of the staff, especially the freedom to teach.

In the Social Sciences Division, a Social Sciences Professorship is supposed to signify a recognition of competence or achievement. The breadth of knowledge, the spread of intellectual interest and the true humanity of the holder (or holders) indicate a degree of competence beyond that of the ordinary professor and that of many of the University’s most distinguished appointees, yet, in last analysis, all that a Social Sciences Professorship confers upon the holder is a title with, perhaps, a scintilla of freedom. Such a chair should be made into something tangible for the holder — into something to be sought after by other members of the staff — into something to attract men from abroad. The minimum salary should be $10,000 at least. The working conditions should be far above those for ordinary men.

3. A New Type of Professorship

It is believed that named professorships with research stipends attached would attract outstanding scholars to the University. Such an appointment would not only carry an adequate salary for the incumbent but also a fund to assure him of a definite research budget so long as he occupied the designated chair. The University is probably not rich enough to afford many such appointments, but certainly it should seek to establish one in at least every division and school — granted that willing donors could be found. In any case, if the University believes its own statements concerning the importance of research and has faith in its appointees, it might well combine the two, in a few instances, to provide University Research Professorships which carry with them definite research grants to be spent as the incumbent elects. The Thomas W. Lamont Professorship at Harvard is of this type. It is held at the moment by Mr. Sumner H. Slichter, a Ph.D. of the Department of Economics of the University of Chicago.

4. Research, Clerical and Library Assistance

The climate for research around the University is not as favorable as speeches and propaganda would indicate. The professorial staff — the highest-priced talent along with administrators in the University — is required and expected to do all manner of chores that should be done for them if research output is to be maximized. Adequate stenographic service is often lacking or, at most, is not always immediately available to members of the Department. The stenographic pool in the Dean’s office is inadequate, a reflection, of course, of the present labor situation. But it is operated on the basis of bookkeeping arrangements which seem to make it freely available to all staff members only on the basis of antecedent budgets. Stenographic service should be available freely to all members of the staff for University business, for correspondence arising in connection with their work (in order to save valuable time) and for all research needs, including the copying of materials. Courses also could be improved if professors could make more materials available to students, perhaps on a nominal fee basis operated through departmental offices.

Similarly, a reasonable amount of clerical and library service should be available to staff members. Now such service is extended only as given research projects are approved, as special deals are made with individual faculty members, or as special services are given as a favor or in recognition of something or other. So long as these services are not generally available or can be had only upon request, there is a tendency that they will go first to the most vocal groups. In any case, the Department has too few people available to do the odd jobs to lighten the work and increase the research output of the faculty. Arrangements might be made whereby a clerical or service pool could meet the needs of many staff members.

5. Reduction in Examinations

The emphasis on examinations other than course examinations makes such tests too arduous a task to be well performed by the University staff. Everywhere there is objection! The time given to special terminal, qualifying and other examinations is grudgingly provided. It is given at the expense of research, creative thinking, or writing. And when the work is turned over to hired examiners who know examination techniques, but who are untrained in the fields involved, the examinations themselves become an intellectual travesty. (Actual illustrations can be supplied on request.)

It is recognized that many examinations are required and that there is a place for trained examiners; but the emphasis on examinations at the University is out of proportion to their worth. At the graduate level these examinations have operated to lower scholastic standards. Part of this is due to the efforts to deprecate courses and to offer illusory means for speeding up the educational process, hardly appropriate in the graduate and professional schools. Students are told they can visit courses (registering for R’s) and as long as they can pass final examinations they can qualify for degrees. The result is that special examinations have to be prepared; that students are rated on too limited a sample of their work; that recommendations of the University count for less than they once did. Another result of the examination emphasis is that students bone up for examinations, try their luck on this or that test and if they pass (by good fortune or otherwise), they are advanced or awarded the appropriate degrees.

From every point of view, too much faculty time is spent on examinations of various kinds; too large a fraction of the student’s record is based upon them.

6. Teaching Loads

In the matter of teaching loads, the Department, on the basis of University of Chicago conditions, has little cause for complaint. The Department has been well treated. Nevertheless, for the greatest good of the University it would like to indicate that teaching loads, even in the Department, are too high for the attainment of the best standards of graduate instruction and research.

Differentiations in teaching loads are appropriate. The load in the College may well be higher than in the Division, but in graduate and professional schools the teaching load should be low if the scholarship and research of the faculty are to be maximized. It may also be appropriate to have different teaching loads, on the average, for the ranks of assistant professor, associate professor and professor. It is the load of the productive scholars which really counts. Harvard and Columbia both have a teaching load of four hours a week for professors of Economics. This is also a factor of importance in the competition with these universities for staff members. It is a factor also affecting the quality of graduate instruction.

The reduction of teaching loads should be made a matter of University policy.

7. Salary Schedules

Salaries of members of the Department are believed to compare favorably with other salaries paid in the University. The general level of salaries paid at the University of Chicago places it among the high-salaried institutions, but it no longer ranks at the top. Harvard has recently raised its minimum professorial salary to in excess of $9,000, with commensurate increases along the line. The level of payments at Columbia, the Massachusetts Institute of Technology, and California Institute of Technology, for example, exceeds the level prevailing at Chicago.

Nor is it certain that the new salary plan will help attract eminent scholars to the University of Chicago. The experience of the Department to date has not been favorable to the new plan. Regardless of sentiments for and against the 4E Contract, its operation should be watched with care lest it adversely affect the quality of new appointments. In order to correct one evil, a greater one — the refusal of offers of appointment — may have been created. Many features of the 4E Contract make such terms unattractive to men who have been well treated by other institutions of high repute. If an outstanding scholar will not accept the 4E Contract, another type of contract should be offered. It is more important to secure the right scholars than to preserve a unique salary plan.

Changes in living costs have greatly decreased the value of payments here. Among the items on the postwar agenda should be new salary scales.

8. Faculty Housing

The Department was much gratified to see that the question of adequate housing for the faculty is again being considered. During the past year, more than one person who was being approached as a potential faulty member declined to consider an offer from the University as long as housing facilities are what they are in Chicago, and especially in Hyde Park. These facilities will remain unattractive until the University improves them. Princeton and Stanford, for example, have made notable contributions to the development of faculty housing. Appropriate housing should also be a good investment. If the Trustees should be unwilling to invest endowment funds in a faculty housing venture, a private company, or even a public housing corporation, should be organized in the neighborhood to meet this vital need.

Attention should also be given to the improvement of the University neighborhood. Its deterioration is a matter of great concern, affecting far more than the value of adjacent properties.

9. Miscellaneous Suggestions

There has always been much talk about improving the lot of younger men. Greater equality could be provided if faculty perquisites were increased. Former tuition differentials to faculty children and wives could be restored, or even increased with the number of children in each family. Hospital rates could be reduced. Out-patient medical service could be provided for University families at small cost. The present shortage of practicing physicians would make such a service a real boon. The University in its own interest, too, could afford to provide free medical examinations for faculty members and employees with increased public health services available at nominal cost. It might thus decrease illness among staff members or even add to their span of life (a thing in which it may not be interested under the rigid enforcement of retirement at age 65). Even the retirement policy might be examined in connection with the state of health and mental ability of emeriti over the last decade. It may be that the University is losing the services of distinguished men a few years too soon. All of these things could be done on a group basis with returns far in excess of cash outlays. To the members of the staff they would constitute significant increases in real wages.

[…]

Source: University of Chicago Library. Department of Special Collections. Office of the President. Hutchins Administration Records. Box73, Folder “Economics Department, ‘Post-war Plans,’ Simeon E. Leland, 1945” pp. 30-36.

Image Source: Portrait of Simeon E. Leland. University of Chicago Photographic Archive, apf1-03716, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library. Image colorized by Economics in the Rear-view Mirror.