Harvard. Principles of Economics, Summer School. Syllabus and Exams, 1942.

 

 

Harvard University was able to switch into a three semester per year mode in the very first summer after the U.S. entered World War II. There were two versions of the standard Principles of Economics course offered, one which extended over the twelve week summer term and one very intensive version that covered the material of a normal year-long course in just six weeks by having the students in class for two hours per days for five days per week. There was also a Principles “Lite” version that ran for only six weeks and covered just half the material apparently.

The syllabus for the full twelve week version of Economics A lists 2,600 pages of assigned reading for the  course. Nominally there would be five one-hour sessions per week, so on average for the sixty sessions students were expected to read 40-45 pages per day. Call me cynical, but I would be surprised if the average of the distribution were even half that pensum.

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Summer enrollment in Principles of Economics, 1942

“The large number of course enrolments meant that individual classes were very much larger than in preceding years. The largest classes were Mathematics SAa, with 436 students, English SAa, with 347, English SAb, with 329, Mathematics SAb, with 299, and Economics SAa, with 222 students. Enrolment in 22 courses was 100 or more.”

Source:  Harvard University. Report of the President of Harvard College for 1941-1942, p. 356.

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Course Announcements for Summer School 1942 

Economics SAa ¹hf. Principles of Economics.
Half-course (first session). Mon. through Fri., at 11. Professor Burbank, and other members of the Department.

Economics SAa may be taken by properly qualified Freshmen with the consent of the instructor.
SAa and SAb provide an introductory study of the present organization of industry, money and the mechanism of exchange, the theory of value, foreign trade and tariff policy, the distribution of wealth; i.e., the forces governing the incomes of the laboring, land-owning, capitalist and business classes, and the relation of government to industry. The course is conducted entirely by oral discussion.

 

Economics SAb ²hf.Principles of Economics
Half-course (second session). Mon. through Fri., at 11. Professor Chamberlin, and other members of the Department.

Economics SAb may be taken by properly qualified Freshmen with the consent of the instructor.
Economics SAa is a prerequisite for the course.
For description see SAa.

 

Economics SA¹(to count as a whole course in the first session). Principles of Economics
Whole course (first session). Mon. through Fri., 9 to 11.  Professor Burbank, and other members of the Department.

Economics SA¹ is identical with SAa and Sab, the two, however, combined and completed in one session. Freshmen will not be admitted to this course. For description see SAa.

 

Economics SB ¹hf. Principles of Economics
Half-course (first session). Mon. through Fri., at 11. Dr. Monroe.

If a Harvard student counts Economics SB for a degree, Economics A may be counted as a half-course only. Ordinarily students concentrating in History, Government, and Economics must take Economics A, SA, or SAa and SAb.
Course SB gives a general introduction to economic study, and a general view of Economics for those who have not further time to give to the subject.

 

Source:   Final Announcement of the Courses of Instruction offered in the Summer Term 1942 published in Official Register of Harvard University, Vol. 39, No. 16 (April 20, 1942), pp. 21-22.

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ECONOMICS A
Summer Term, 1942

Sources:	Arnold, Thurman	The Bottlenecks of Business (1940)
*	Benham and Lutz	Economics, American Edition (1941)
	Bidwell, P.	Economic Defense of Latin America (1941)
**	Federal Reserve System	Federal Reserve Charts on Bank Credit, Money Rates and Business (1941)
	Garver and Hansen	Principles of Economics, Revised Edition (1937)
	Golden and Ruttenberg	The Dynamics of Industrial Democracy (1942)
	Johnson, E.A.J.	Some Origins of the Modern Economic World (1936)
**	Luthringer, Chandler and Cline	Money, Credit and Finance (1938)
	Meyers, A.L.	Elements of Modern Economics (1937)
**	Neal, A.C., Editor	Introduction to War Economics (1942)
	Slichter, S.E.	Modern Economic Society (1928)
	-ditto-	The Economics of Collective Bargaining (reprint)
	-ditto-	The Period 1919-1936 in the United States, Its Significance for Business Cycle Theory, in Review of Economic Statistics, Vol. XIX, Feb. 1937, No. 1, Part I
**	Staff members	Syllabus: Economics A
	Taussig, F.W.	Principles of Economics, Vol. I Third Edition Revised (1921)
**	Taylor, H.	Main Currents in Modern Economic Life (1941)
	T.N.E.C.	Price Behavior and Business Policy, Monograph No. 1 (1941)
	T.N.E.C.	Competition and Monopoly in American Industry, Monograph No. 21 (1940)

** To be purchased by students
* Suggested for purchase

Note:  Essay due at end of eight week.

 

ECONOMICS A
Outline and Reading Assignments
Summer Term, 1942

 

Weeks			Pages
1st	Part I.	EMERGENCE OF MODERN ECONOMIC INSTITUTIONS The economic problem; historical development of social and legal institutions; their effect on the economic problem.
		Johnson,  Ch. 1, Economic Activity and Economic Development	7
		_______, Ch. 2, The Late-Medieval Background	21
		_______, Ch. 3, The Emergence of Capitalism	34
		_______, Ch. 4, The Beginnings of Scientific Technology	32
		_______, Ch. 5, The Formulation of Capitalist Theory	23
		_______, Ch. 6, Protection and the Transplantation of Industrialism	24
		_______, Ch. 7, The Export of Capital and the Genesis of Economic Imperialism	15 156
Part II.		MODERN ECONOMIC INSTITUTIONS
		A—The economic problem again; how it is solved today; the concept of useful production.
		Benham, Ch. 1, General Survey	17
		Taussig, Ch. 2, Of Labor in Production	13 30
		B—Description of money flows and goods flows in a capitalist society; the relation of the division of labor to these flows; the forms of business organization and their relation to the division of labor.
		Taylor, Ch. 6, Vol. I, The National Income and its Distribution	18
2nd		_______, Ch. 12, Vol. I, Industrial Techniques	16
		Taussig, Ch. 3, Division of Labor	18
		_______, Ch. 4, Large Scale Production	15
		Slichter, Ch. 8, (M.E.S.) Modern Business Organization	26 93
Part III.		THE DIVISION OF LABOR AND MONEY Division of Labor necessitates exchange; exchange is facilitated by the use of money; digression to explain the working of the monetary system in the United States.
		Luthringer, Ch. 1, Functions and Significance of Money	24
		_______, Ch. 2, Kinds of Money	23
		_______, Ch. 3, Credit and Credit Instruments	15
		_______, Ch. 4, Investment Institutions and Commercial Banking	23
		Pamphlet, Credit Expansion, in Economics A Syllabus	14
		Luthringer, Ch. 5, Central Banking and the Federal Reserve System	20
		_______, Ch. 6, The Quantitative Control of Bank Credit	18
3rd		_______, Ch. 7, Meaning of the Value of Money	14
		_______, Ch. 8, Equation of Exchange and the Quantity of Money	16
		_______, Ch. 9, Velocity of Money and the Volume of Trade	17 184
Part IV.		THE SOLUTION TO THE ECONOMIC PROBLEM
		A—The Markets for Commodities Analysis in this section refers only to the determination of prices and quantities of commodities produced by a business firm. No answers are given to the questions: Why are wages, rents, interest high or low?
		A.1 The Business Firm vis-à-vis Consumers in an unregulated market
		A.1.a Consumer Demand Why consumers spend their incomes as they do, the process whereby consumer demand is transmitted to the market.
		Benham, Ch. 2, Markets	25
		_______, Ch. 3, Demand	16
		_______, Ch. 4, Prices with a Fixed Demand	10
		_______, Ch. 5, Changes in Demand	10 61
		A.1.b The Business Firm The final relationship of cost to price depends on the competitive conditions in each commodity market; the profit motive the main determinant of the firm’s decisions.
		Benham, Ch. 12, The Controlling Power of Demand	8
		_______, Ch. 13, The Problems of the Firm (omit Sec. 11)	37
		_______, Ch. 14, Monopoly	18
		Monograph 21, Ch. 1, the Nature and Significance of Competition	18
		Monograph 1, Part 1, Ch. 2, Nonprice Competition	53
4th		_______, 1, Part 2, Ch. 1, Types of Geographical Price Structures	14 148
		A.2 Effect of Government Regulation on the unregulated market
		A.2.a Introduction General analysis of regulation and impediments to free markets. Sections b, c, and d elaborate more completely some issues presented here.
		Arnold, Ch. 1, The Basic Problem of Distribution	19
		_______, Ch. 2, How Restraints of Trade Affect your Standard of Living	25
		_______, Ch. 3, How Restraints of Trade Unbalance the National Budget	13
		_______, Ch. 4, A Free market in time of National Emergency or War	30
		_______, Ch. 5, An Elastic Procedure…to Prevent…Seizure of…Power…	24
		_______, Appendix I and II	20
		_______, Ch. 6, The Test is Efficiency and Service—not size	15
		_______, Ch. 7, Procedure Under the Sherman Act…	31
5th		_______, Ch. 8, The Clarification of Law through public enforcement	26
		_______, Ch. 9, Antitrust Enforcement for the Betterment of the Consumer	21
		_______, Ch. 10, Bottlenecks between the Farm and the Table	26
		_______, Ch. 11, Labor—Restraints of Trade among the Underdogs	19
		_______, Ch. 12, The Rise of a Consumer Movement	37 306
		A.2.b Regulation and the Consumer
		Taylor, Vol. II, Ch. 37, Consumption Standards	15
		____________, Ch. 38, Consumers and the Business System	19
		____________, Ch. 39, Consumer Cooperation	20 54
6th		A.2.c Regulation and the Business Firm
		(1) Monopoly
		Taylor, Vol. I, Ch. 15, The Growth of Big Business	18
		___________, Ch. 16, The Trend Toward Monopoly	17
		___________, Ch. 17, Monopolies and Public Policy	16 51
		(2) Public Utilities Techniques of regulation different for firms classified as public utilities; the TVA—an example of a new regulatory device.
		Taylor, Vol. II, Sec. 13, pp. 363-364 Introduction	2
		____________, Ch. 48, The Nature and Scope of Public Regulation	15
		___________, Ch. 49, The Price of Utility Services	16
		___________, Ch. 50, Recent Expansion of Federal Control	19
		___________, Ch. 51, The State as Operator	17 69
		A.2.d Agriculture—a special problem
		Taylor, Vol. II, Sec. 8, Agriculture and the Market	3
		____________, Ch. 30, The American Farmers	18
		____________, Ch. 31, Farmers in the Market System	19
		____________, Ch. 32, Agriculture and Public Policy	24 64
7th		B. The Markets for Productive Agents (Factors of Production) The Analysis in this section refers to the determination of the prices of the factors of production, land, labor, capital and entrepreneurship in the markets where they are bought and sold. The entrepreneur’s reward, profit, is decided for him by the success or failure of his production plan. This market is, of course, not independent of the commodity markets. The unclassified reading discusses the productive agents of the United States:
		Taylor, Vol. I, Ch. 8, How Productive Resources are Used	17
		___________, Ch. 9, Population	19
		___________, Ch. 10, Land	15
		___________, Ch. 11 Localized Natural Resources	21
		___________, Ch. 13 Capital	19 91
		B.1 The Factors vis-à-vis Firms in an Unregulated Market
		B.1.a. The Pricing Process in General
		Benham, Ch. 9, Combination of Factors (omit sec’s 5,6)	18
		Meyers, Ch. 11, The Distribution of Income	11 29
		B.1.b. The Prices of Each Factor of Production
		Benham, Ch. 15, The Mobility of Factors of Production	10
		_______, Ch. 16, Wages, pp. 258-269	20
		_______, Ch. 18, Rent	13
		Garver and Hansen, Ch. 26, Interest	23
		_______________, Ch. 27, Profits	12 78
8th		B.2 Effects of Government Regulation and other Institutional Aspects of Distribution on the Markets for Factors.
		B.2.a The Labor Market
		Taylor, Vol. II, Ch. 33, The American Labor Market, pp. 75-89	14
		___________, Ch. 35, The Labor Movement	24
		Slichter (pamphlet). The Economics of Collective Bargaining	23
		Taylor, Vol. II, Ch. 36, Public Policy Regarding Labor	22
		Benham, Ch. 16, Wages, pp. 269-275 (section 9)	6
		Golden, entire book. Write an essay of not more than 1200 words evaluating the ideas in the book.	347 436
9th		B.2.b The Market for Savings It is to be noted that firms and others may secure funds from credit created by commercial banks.
		Taylor, Vol. I, Ch. 23, pp. 431-434 only (self financing by corporations)	4
		__________, Ch. 24, Investment Credit Institutions	19
		__________, Ch. 25, The Security Markets	17
		__________, Ch. 26, Regulation of Securities and Exchanges	18 58
		C. Public Finance and the Economic Problem The State not only regulates markets as described above but also influences the prices of factors and commodities in the process of financing the production of public goods (roads, protection, etc.). The effects of government finance on the level of national income to be postponed to Part VI.
		Luthringer,  Ch. 12, The Public Economy	13
		_________, Ch. 13, The Revenue System	20
		_________, Ch. 14, Tax Incidence	26
		_________, Ch. 15, The Income Tax	20
		_________, Ch. 16, Property and Other Taxes	18
		_________, Ch. 17, Public Credit	14
		_________, Ch. 18, Principles of Public Credit	16 127
Part V.		INTERNATIONAL ASPECTS OF MARKETS AND FINANCE Analysis of international trade and finance; the free market and the regulated market. Previous analysis emphasized only domestic markets although the principle of international trade is applicable to regions within a country to some extent; Latin America and the War.
10th		Benham,  Ch. 25, The Theory of International Trade	22
		_______, Ch. 26, Balances of Payments	10
		_______, Ch. 27, Free Exchange Rates	10
		_______, Ch. 28, The Gold Standard	22
		_______, Ch. 29, Exchange Control	8
		_______, Ch. 30, Import Duties and Quotas	9
		Bidwell, Ch. 1, War and the Monroe Doctrine	16
		______, Ch. 2, Propaganda and Politics	13
		______, Ch. 3, German Economic Penetration	12
		______, Ch. 4, The Weapons of Economic Defense	33
		______, Ch. 5, The Fallacy of Hemisphere Self-Sufficiency	14 169
Part VI.		PROSPERITY AND DEPRESSION Analysis of the reasons why all prices move together; why all factors tend to become unemployed—hence the emphasis on the movements of national income. Previously, the analysis of prices was chiefly concerned (with the exception of the value of money) with relative prices. Existence of international markets tends to spread the cyclical pattern.
		A. Explanation and Verification of Business Cycle Theories
		Benham, Ch. 7, The Volume of Production, pp. 113-125	13
		Garver and Hansen, Ch. 21, Business Cycles	18
11th		Benham, Ch. 20, Economic Progress and the Trade Cycle, pp. 347-356	9
		Slichter, R.E.S., The Period 1919-1936 in the U.S. Its Significance for Business Cycle Theory	19 59
		B. Governmental Policy and Business Cycles
		Taylor, Vol. II,  Ch. 44, Deficit Spending	16
		____________, Ch. 12, The State as Provider (Introduction)	2
		____________, Ch. 45, Providing Minimum Needs	17
		____________, Ch. 46, Social Security	19
		____________, Ch. 47, Public Housing	17 71
Part VII.		TOTALITARIAN ALTERNATIVES TO CAPITALISM Analysis of the solution to the economic problem in totalitarian economic systems.
		Taylor, Vol. II, Sec. 14, Totalitarian Alternatives to Free Markets (Introduction)	2
		____________, Ch. 52, Economic Basis of Totalitarianism	16
		____________, Ch. 53, The Soviet Economy	23
		____________, Ch. 54, The Fascist Economy in Italy	19
		____________, Ch. 55, The National Socialist Economy in Germany	20 80
12th	Part VIII.	THE ECONOMICS OF WAR
		Neal,  Ch. 1, Basic Economic Problems of War	15
		____, Ch. 2, Economic War Potential	23
		____, Ch. 3, Problems of War Production	21
		____, Ch. 4, War Labor Problems	25
		____, Ch. 5, Financing the War Effort	19
		____, Ch. 6, Financing the War Effort, Business Finance	27
		____, Ch. 7, Wartime Management of the Monetary and Banking System	28
		____, Ch. 8, The Control of Individual Prices	31
		____, Ch. 9, Economic Warfare	20
		____, Ch.10, Post-War International Economics	19 228

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archives. Randall Hinshaw Papers, Box 1, Folder “Schoolwork, 1940s”.

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Final examination first half of course

SUMMER SCHOOL OF HARVARD UNIVERSITY
[First Session. Summer, 1942]
ECONOMICS SAa

Part I

(One hour)

Write on BOTH of the following in this section:

1. Analyze carefully the effects of the following on average cost, marginal cost, marginal revenue and price for the individual firm in the short run:
   1. A tax of ten cents per unit of output on a monopolist.
   2. A subsidy of ten cents per unit of output to firms in a purely competitive industry.
2. Trace the repercussions on member bank reserve balances, Treasury deposits with the Federal Reserve System and reserves of the Federal Reserve System caused by:
   1. The purchase and sterilization of gold by the Treasury.
   2. The purchase of U.S. government bonds by the Federal Reserve System.
   3. A transference of Treasury deposits from the Federal Reserve System to member banks.

Part II

(Two hours)

Write on any FOUR of the following in this section:

3. “Regulation of public utility rates may be effected by limiting charges to yield a fair return on a fair value of the property. This will result in prices comparable to competitive conditions. An alternative type of rate regulation may be accomplished by using as a ‘yardstick’ the rates which a government-owned plant could economically charge.”
   1. Does the use of the fair return formula approximate the price which would evolve in a competitive market for the same commodity?
   2. May the rates fixed by the Tennessee Valley Authority be used as a “yardstick” for privately-owned power companies?
4. “There seems to be a common belief that banks, by some process of sleight of hand, contrive to create a multiple of the amount of money they receive. The truth is that they can lend not more, but less than the amount of money that comes into their hands.”
   Do you agree? Explain fully.
5. “It is not size in itself that we want to destroy….What ought to be emphasized is…the evil of industries which are not efficient or do not pass (the gains from) efficiency on to consumers.” Arnold.
   Examine the consistency of this statement.
6. Contrast carefully the industrial economic world of nineteenth century England with the industrial economic world of fourteenth century England.
7. Write a letter to your congressman briefly explaining what you believe to be the basic American farm problems and critically evaluating the New Deal attempts to alleviate them.

Source:  Harvard University Archives. Department of Economics, Course reading lists, syllabi, and exams 1913-1992 (UA V 349.295.6), Box 1, Folder “Economics 1, Exams 1939-1962”.

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Final examination second half of course

HARVARD UNIVERSITY
[Second Session. Summer, 1942]
ECONOMICS SAb

Part I

(One hour)

Write on BOTH of the questions in this section:

1. “The main fiscal problem of the war is the diversion of a large share of the national income from the private economy to the public fisc for war purposes.” Outline and defend a plan of taxation and borrowing which in your opinion effectively will solve this problem.
2. Analyze the effects of an increase in the supply of labor on (a) the remuneration of the various productive factors and (b) the changes in output of those industries whose costs are mainly labor and those whose costs are mainly capital.

Part II

(Two hours)

Write on any FOUR of the questions in this section:

3. Write an essay on the topic of cyclical unemployment emphasizing (a) the processes by which full employment is supposed to be effected in a free enterprise economy and (b) the reasons why these processes have failed to operate.
4. What controls are necessary for the orderly and equitable distribution of goods during war time in the markets for factors of production and the markets for consumers’ commodities? Indicate the results likely to follow from partial rather than complete controls in these two major groups of markets.
5. “Labor unions cannot raise the wages of labor within an occupation without reducing the number employed in that occupation since the entrepreneur cannot afford to pay labor more than the value of its marginal product.” Do you agree? Explain fully.
6. Discuss carefully three methods of correcting an adverse balance of payments. Indicate the effects of each method on the level of domestic money incomes, the foreign exchange rate, merchandise exports and imports and short-term capital movements.
7. Explain the chief methods of regulating securities markets in the United States. State concisely the functions of securities markets and evaluate the success of regulation in aiding the orderly functioning of these markets.

Source:  Harvard University Archives. Department of Economics, Course reading lists, syllabi, and exams 1913-1992 (UA V 349.295.6), Box 1, Folder “Economics 1, Exams 1939-1962”.

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Final Exam Intensive Course, First Session 1942

SUMMER SCHOOL OF HARVARD UNIVERSITY
[First Session. Summer, 1942]
ECONOMICS SA¹

I

(One hour)

1. Reply fully to the following questions:
   1. Which are the main problems confronting the economy of this country during the present war?
   2. What measures of economic policy would you propose to cope with them?

II

(About one half hour each)

2. What are the effects of the practice of self-financing by corporations upon
   1. the rate of interest;
   2. the allocation of the nation’s resources;
   3. the prevalence of competition, or of monopoly, in the economy as a whole?
3. Let a tax be imposed upon a monopolist and the amount due be determined by either of the following methods:
   1. a fixed percentage of his profits;
   2. a fixed money amount per unit of output;
   3. a fixed percentage of the total money value of his sales;
   4. a global fixed sum, independent of either output or sales.

In which of these cases will he be able to shift the tax forward? Prove your conclusions by a graphical analysis.

4. Criticize the following statement carefully:
   “The average citizen is inclined to think that there is nothing at all which he himself can do to check inflation. He considers the anti-inflationary fight a task for Uncle Sam only and therefore urges control of prices and labor and the draining off of excessive purchasing power. Actually, the citizen himself can do a great deal, and the efforts of the government will be far less effective unless he does.
   “He can co-operate with the government by putting money in the bank and making it work for him, instead of drawing it out, letting it lie idle and exposing it to the danger of theft, fire and forgetfulness, He can pay his debts. He can discharge his mortgage more rapidly. He can make larger down payments on installment purchases than he has to. He can be more generous to poor relatives. He can see his oculist, dentist or family doctor more often, and pay cash. He can contribute more liberally to local and national charities. He can refuse to hoard goods. He can refrain from rushing to buy the very articles of which there is a shortage….” (The Boston Herald, July 28, 1942, p. 14)
5. Trace the main effects that the abolition of the tariff on beef (one of the major export articles of Argentina) would, in peacetime, have upon the economies of the United States and of Argentina. Distinguish the short-run and the long-run consequences.

Source:  Harvard University Archives. Harvard University. Final examinations, 1853-2001. (HUC 7000.28) Box 6, Papers Printed for Summer Examinations First Session, August, 1942.

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Final Examination for Principles of Economics “Lite”

SUMMER SCHOOL OF HARVARD UNIVERSITY
[First Session. Summer, 1942]
ECONOMICS SB

I

(About one hour)

1. Write an essay on one of the following topics:
   1. Long-run value under competition,
   2. The rate of wages,
   3. Investment and interest,
   4. Profits

II

(Answer TWO questions from this group.)

2. How should you expect the following to affect the selling price of a farm: an increase in population; a fall in the rate of interest; the opening of a new market for its products; a bad crop failure?
3. Explain the meaning of the following terms and show how one of them enters into the explanation of economic phenomena: comparative advantage; bank reserves; the gold points; marginal revenue.
4. What are the principal factors responsible for cyclical fluctuations in business activity?

III

(Answer TWO questions from this group.)

5. Explain the nature and operation of the forces which cause variations in the purchasing power of the dollar.
6. Outline the principal forms of unemployment and discuss one of them in some detail.
7. Compare the advantages and disadvantages of the different methods available for financing a war.

Source:  Harvard University Archives. Harvard University. Final examinations, 1853-2001. (HUC 7000.28) Box 6, Papers Printed for Summer Examinations First Session, August, 1942.

Image Source: Harvard’s Commencement in 1943. From The Harvard Gazette, November 10, 2011.