Author: Irwin Collier

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Exam Questions Johns Hopkins Undergraduate

Johns Hopkins. Final exams for undergraduate economics courses. 1911-1912

Six semester courses in political economy was Johns Hopkins University’s entire offerings for undergraduates interested in the field of economics in 1911-12.

_____________________________

Instructors of Political Economy
(Undergraduate)

JACOB H. HOLLANDER, Ph. D., Professor of Political Economy. A.B., Johns Hopkins University, 1891, Fellow, 1893-94, and Ph.D., 1894. Treasurer of the Island of Porto Rico, 1900-01; Special Commissioner Plenipotentiary to Santo Domingo, 1905-06; Financial Adviser of the Dominican Republic, 1908-10.

GEORGE ERNEST BARNETT, Professor of Statistics. A.B., Randolph-Macon College, 1891; Fellow, Johns Hopkins University, 1899-1900, and Ph.D., 1901.

_____________________________

UNDERGRADUATE COURSES

Political Economy 1.

[Political Economy 1 is required to later attend Polical Economy 2 and 3.]

(a) Economic History. The economic development of England from the tenth century to the present time and the most important experiences of the United States are studied.

Three hours weekly, first half-year.
Professor BARNETT.

(b) Elements of Economics. Particular attention is given to the theory of distribution and its application to leading economic problems.

Three hours weekly, second half-year.
Professor BARNETT.

Political Economy 2.

[Undergraduate Course 2 is open only to such students as have completed Course 1]

(a) Finance. The theory and practice of finance are considered, with particular reference to problems of taxation as presented in the experience of the United States.

Three hours weekly, first half-year.
Professor HOLLANDER.

(b) Money and Banking. The principles of monetary science are taught with reference to practical conditions in modern systems of currency, banking, and credit.

Three hours weekly, second half-year.
Professor BARNETT.

Political Economy  3.

[Save under exceptional circumstances, Course 3 only to students who have completed 1 and 2.]

(a) Statistical Methods. After a preliminary study of the value and place of statistics as an instrument of investigation, attention is directed to the chief methods used in statistical inquiry.

Three hours weekly, first half-year.
Professor BARNETT.

(b) Economic Theory. Critical study is made of recent economic theories.

Three hours weekly, second half-year.
Professor HOLLANDER.

Source: Programmes of Courses. Published in The Johns Hopkins University Circular, New Series, 1911, No. 6 (June 1911) Whole Number, 236.

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[December, 1911.]

POLITICAL ECONOMY I [a].

  1. Distinguish the one-field, two-field and three-field systems of agriculture.
  2. Describe the government of the craft guild in the fourteenth century.
  3. Discuss the growth of capitalism and its influence on the concept of usury.
  4. Describe the craft guild stage of industry and distinguish it from succeeding and preceding stages.
  5. What economic effects are traceable to the Black Death?
  6. What place did Fairs fill in the organization of economic life in the fifteenth century?
  7. What is meant by an economic unit?
  8. Describe the chief economic institutions which have their origin in the seventeenth century.
  9. Describe the chief mechanical inventions from 1738 to 1790.
  10. What relation is there between the extent or width of the economic unit and the form of industrial organization?

____________________________

[March, 1912.]

POLITICAL ECONOMY I [b].

  1. How far is saving economically justifiable?
  2. What are the advantages of the corporation as a form of business organization?
  3. Define elasticity of demand. Draw and explain two demand curves, one representing an elastic and one an inelastic demand.
  4. Is it correct to say that the demand for a commodity is greater than the supply?
  5. Explain what is meant by consumers’ surplus. Illustrate by a diagram.
  6. Under what circumstances would monopoly price be less than competitive price?
  7. Define cost of production. Under what conditions does the value of a commodity tend to equal its cost of production.
  8. State and illustrate the economic laws relating to (a) the size of the business unit and (b) the proportion of the factors of production.

____________________________

[June, 1912]

POLITICAL ECONOMY I [b].

  1. Trace the attachment of the entrepreneurial function through the different economic stages.
  2. At what period in economic evolution did capital become a claimant in distribution?
  3. What is the “principle of marginal productivity?” Explain the relation of this principle to the law of diminishing returns.
  4. Explain what is meant by the “marginal laborer.” Distinguish the marginal laborer and the marginal unit of labor.
  5. What is meant by “the differential principle?” Show to what parts of the theory of distribution this principle is applicable.
  6. Discuss the arguments for and against the single tax.
  7. What effect does the invention of machinery have on the rate of interest?
  8. Distinguish between the “annual product” and the “annual social dividend.”
  9. Distinguish competitive and monopoly profits.
  10. Would a tax on the value of agricultural land raise the price of farm products?

____________________________

December 16, 1911.

POLITICAL ECONOMY II [a].

  1. The scope of Public Finance, as a study, and its relation to the science of Political Economy.
  2. In what particulars does the economy of the state differ from the economy of the individual?
  3. What policy should influence the distribution of public expenditure upon education between central and local government?
  4. Show the importance of economic or quasi-private receipts as a source of revenue to the federal government in the United States and in Germany respectively.
  5. State the arguments for and against (a) proportional, and (b) progressive taxation.
  6. Discuss the merits and demerits of the taxation of incomes.
  7. Discuss the incidence of an excise tax on manufactured tobacco (cigars and cigarettes).

____________________________

[March, 1912]

POLITICAL ECONOMY II [b].

  1. Discuss the physical characteristics of a good medium of exchange.
  2. Under what circumstances does bad money drive out good money?
  3. What evils flow from instability in the value of the medium of exchange?
  4. State the quantity theory of money.
  5. Discuss Professor Scott’s objections to this theory.
  6. Explain the compensatory action of the bimetallic system. Illustrate by a series of diagrams.

____________________________

[June 1912]

POLITICAL ECONOMY II [b].

  1. What is the “unearned increment tax” and how can it be used in American municipal finance?
  2. What is the incidence of the high license tax on saloons in Baltimore City?
  3. Define money. Is a bank check money?
  4. Would it be possible to have a monetary system under which fluctuations in prices would not occur?
  5. Describe the governmental organization of the Bank of France.
  6. What advantages are there in a system of branch banks?
  7. What is the purpose of a bank reserve? Under what circumstances would a bank need no reserve?
  8. Compare the bank note circulation in the United States and France.
  9. Compare the methods used by the Bank of England and the Bank of France for the protection of their reserves against foreign drain.
  10. Explain the method by which in an emergency the Bank of England brings the market rate up to the bank rate? Why does it do this?

____________________________

[December, 1911.]

POLITICAL ECONOMY III [a].

  1. What is the distinction between cause and chance?
  2. What is a “crude” death rate? Explain in detail how the standard death rate is obtained.
  3. What is meant by a “measure of dispersion?” What is the most usual one?
  4. Define the field of investigation in which the statistical method is useful.
  5. Under what circumstances is the geometric mean a useful form of average?
  6. Define percentile, quartile, mode and arithmetic mean.
  7. Explain the two chief methods of gathering statistical information. Under what circumstances may each be properly used?
  8. Explain the theory of weighting.

____________________________

Note: no March 1912 examination for Political Economy III was found in the collection of examination

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May 31, 1912.

FINAL EXAMINATION
IN POLITICAL ECONOMY III.

  1. What has been the relation of statistical science to the development of insurance?
  2. What is the relation of statistics to economics?
  3. Discuss the economies incident to large scale production.
  4. What are the economic services, if any, of speculation?
  5. Monopoly value and the law which governs it.
  6. What defects in our national banking system might a central banking institution, of the European type, be expected to remedy?
  7. Discuss the theory of international trade.
  8. What is the function of the entrepreneur and what principle determines his share in distribution?

Source for the examination questions: The Johns Hopkins University, Eisenhower Library. Ferdinand Hamburger, Jr. Archives. Department of Political Economy. Series 5/6. Box 6/1. Folder “Exams, 1907-1924”.

Image Source: Johns Hopkins University seal on the floor of Gilman Hall, on the Johns Hopkins University campus in Baltimore, Maryland. Library of Congress Prints and Photographs Division Washington, D.C.

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Columbia Economics Programs Faculty Regulations

Columbia. Memo for Planning Graduate Course Work. Vickrey, 1965

What is particularly striking about the following memo written by Columbia University’s economics department chairman William S. Vickrey concerning the academic year 1965-66 is that “macroeconomics” is clearly a word not used in fields or course titles. Macroeconomics is a coming attraction for 1966-67.

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COLUMBIA UNIVERSITY
DEPARTMENT OF ECONOMICS

September 18, 1965

TO: Incoming (first year) graduate students
FROM: William S. Vickrey, Chairman

SUBJECT: Planning your course work for 1965-66

This memorandum is a supplement to two earlier memoranda addresses to incoming and continuing students — dated respectively April 19, 1965 and Labor Day 1965 — which you are presumed to have read. The present supplementary memorandum carries information and advice which otherwise would have to be conveyed orally to each of you in your registration interview with a member of the departmental Committee on Student Progress.

You may disregard the present memorandum in either of two contingencies. If (a) you are coming to us as a transfer student who has had a substantial equivalent of our first-year program of graduate studies, your problems are apt to fall outside the range the memorandum contemplates, and must be dealt with ad hoc. Or if (b) you have already made up your mind to terminate your graduate work with an MA, your problems are much simpler than here contemplated. But if you are now beginning graduate study in economics and are planning a doctoral program (or are planning an MA program which will hold the door open for doctoral work in case you later wish to continue), please study this memorandum and sketch on the attached sheet a plan of course work which takes it into account, as basis for your registration interview.

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As was noted in the mimeographed memorandum of April 19, the academic year 1965-66 is one of transition between the curriculum pictured in the printed Graduate Faculties Bulletin and that sketched for 1966-67 in the mimeograph. Your problem of program-planning has two main sets of objectives: (A) You should aim to arrive as early as possible in your graduate career at a working command of the professional basics which correspond to the four “certificates of proficiency” referred to at the beginning of the statement of new PhD requirements in the memorandum of April 19. Such a command will be presumed in all courses in the number-series 6000, 8000 and 9000; hence both your choice of courses and your ability to master them will be limited until these basics are under control. Furthermore, the earlier you earn your certificates, the more you reduce the danger of an unmanageable peak load arising from simultaneous preparation for these certificates and for the oral examination in subjects. And (B) you should seek in the first year to make an effective beginning with at least one or two of the sequences of more specialized courses which are relevant to fields you are likely to want to present on the oral examination. Since for most first-year students pursuit of objective (A) could readily be made more than a full-time job and pursuit of objective (B) more than a half-time job, you will probably find yourself seeking a compromise– a typical economists’ resource-allocation problem, with your working time as the scarce resource.

Your search for an optimum combination of courses will be conditioned by several peculiarities of the curriculum in this transitional year 1965-66:

  1. Because of the absence on sabbatical leave of Professor A.F. Burns, we do not offer the business-fluctuations sequence G4601-02.
  2. The sequence on monetary theory and policy takes the form this year of a 6-point course (G4711-12) in the first semester. This course is also the closest equivalent available this year to the macro-economics course G4213 [Note: the “4” here is an uncertain reading of an overstruck number] which will be offered from 1966-67 onwards.
  3. Several major subject-matter sequences (those in public finance, international economics, and development-and-planning) are being rearranged to put their logical starting-point in February 1966 (with continuation into autumn 1966). This change does not debar first-year students from all work in these fields: Professor Shoup is prepared to discuss proposals to take G6806 before G6805; and in the international field, students who lack specific undergraduate preparation are presented with a preliminary course (G4901x) in the autumn. Yet on the whole, students to whom these fields are especially interesting will find their time tight in the second semester.
  4. On the other hand, a number of other major subject-matter sequences remain on a schedule under which the logical starting-point is September 1965. Students who are especially interested in these fields will find their time tight in the first semester in case either (a) the Placement Examination puts them in G4210 or (b) they find the monetary-economics course G4711-12 urgent.

You will see from these considerations that it would not be rational for your registration adviser to impose a prefabricated program without regard to your special interests and qualifications. Neither would it be rational for him simply to initial any program you happened to lay before him: it is our experience that a large proportion even of the best-prepared students present preliminary study-plans which would store up trouble for later stages of their doctoral work. So please rough out a preliminary plan (or if you prefer, two alternatives), and come to the registration interview prepared both to explain your proposals and to accept your adviser’s help in bringing them closer to your underlying needs.

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To illustrate the foregoing analysis of the logic of course-programming, here are two hypothetical plans, corresponding to two types of interests and qualifications, lying fairly far apart in the continuum of which our advisers have experience.

Program (a):
Subject-matter Autumn 1965 Spring 1966 Hours committed, as of autumn 1965 Comment
No. Pts. No. Pts.
Program (a): for a well-prepared student of quantitative orientation, with strong interests already established in public finance and in international economics
Micro-economic analysis G6213x 3 G6214y 3 Mon., Wed. 12:00-12:50 Required
Economic statistics G4411x 3 G4412y 3 Tu., Th. 9:00- 9:50 Also lab. Wed.
Monetary economics G4711x
G4712x		 6 —— – (Mon., Wed. 10:00-10:50
Tu., Th. 2:10- 3:00)
Public finance —— – G6805y 3 ——————–
International economics —— – G6903y 3 ——————–
12 12

Plus one other course, with a presumption for economic history of US.

Program (b):
Program (b): for a student of good general background who was not an economics major as an undergraduate, and leans toward historical-institutional studies.
Micro-economic analysis G4210 6 G4212y 3 Mon., Wed. 12:00-12:50 Also lab. Fri.
Economic history of US G4311x 3 G4312y 3 Tu., Th. 10:00-10:50
Industrial organization G4251x 3 G4252y 3 Mon., Wed. 1:10- 2:00
American ec. thought —— – G4232y 3 ——————–
12 12

Plus one other course, with a presumption for economic statistics. Macro-economics (and statistics if not taken in 1965-66) urgent business for 1966-67.

Source:  Columbia University Libraries. Manuscript Collections. Department of Economics Collection. Carl Shoup Materials, Box 11, Folder “Economics Memoranda”.

Image Source: August Rodin’s Le Penseur at Columbia University. InSapphoWeTrust from Los Angeles, California, USA, CC BY-SA 2.0, via Wikimedia Commons.

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Agricultural Economics Exam Questions Harvard

Harvard. Agricultural economics. Description, enrollment, final exam. Carver, 1912-1913

The American Farmer by Carl Wuermer (1930)

 

In 1911 Harvard economics professor Thomas Nixon Carver published a textbook Principles of Rural Economics  that undoubtedly encompassed the content of his course on agricutural economics first taught in 1903-04. Somewhat unusually his book is prefaced with an eight page bibliography.

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Carver’s Earlier Courses
on Agricultural Economics

Links to earlier course material for agricultural economics at Harvard, 1903-04 through 1911-12.

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ECONOMICS 32
Course Description
1912-13

[Economics] 32 2hf (formerly 23 2hf). Economics of Agriculture, with special reference to American conditions. Half-course (second half-year). Tu., Th., and (at the pleasure of the instructor) Sat., at 9. Professor Carver.

A study of the relation of agriculture to the whole industrial system, the relative importance of rural and urban economics, the conditions of rural life in different parts of the United States, the forms of land tenure and methods of rent payment, the comparative merits of large and small holdings, the status and wages of farm labor, the influence of farm machinery, farmers’ organizations, the marketing and distribution of farm products, agricultural credit, the policy of the government toward agriculture, and the probable future of American agriculture.

Source: Harvard University. Division of History, Government, and Economics, Courses of Instruction, 1912–13, p. 67.

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ECONOMICS 32
Course Enrollment
1912-13

[Economics] 32 2hf (formerly 23 2hf). Professor Carver. — Economics of Agriculture, with special reference to American conditions.

Total 11: 8 Graduates; 2 Seniors; 1 Junior.

Source: Harvard University. Reports of the President and the Treasurer of Harvard College, 1912-13, p. 58.

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ECONOMICS 32
Year-end Examination
1912-13

  1. What are some of the larger characteristics which distinguish rural from urban life?
  2. Where would you draw the line between large scale and medium scale, and between medium scale and small scale farming, and what are the principal advantages and disadvantages of each?
  3. Exactly what is the distinction between intensive and extensive farming, and what are the advantages and disadvantages of each?
  4. To what system of culture does the horse as a draft animal belong, and what are some of the characteristics of that system?
  5. Where do we find the larger percentage of tenancy in this country, where land is highly productive or where its productivity is low? How would you explain the situation?
  6. Give your ideas as to the function of the middle-man, and to what extent and how that function may be performed by the farmers themselves.
  7. What are the advantages of diversified farming as compared with specialized farming?
  8. Give your ideas as to how country life may be made more attractive to men and women of education and culture.

Source: Harvard University Examinations. Papers set for final examinations in history, history of science, government, economics, philosophy, social ethics, education, fine arts, music in Harvard College (June 1913), p. 56.

Image Source: The American Farmer by Carl Wuermer (1930) at the Wichita Art Museum website.

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Earlier material

ca. 1904 Problem set
1903-04 Final exam
1905-06 Final exam
1908-09 Description, enrollment, final exam
1910-11 Description, enrollment, final exam
1911-12 Description, enrollment, final exam

 

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Development Exam Questions Harvard

Harvard. Economy of Latin America. Syllabus, Readings, Final Exam. Clague, 1965-1966

Father Ewan Clague and Son Christopher Clague

In preparing this post that features course materials from the second term of the 1965-66 academic year at Harvard for Christopher K. Clague’s “Economy of Latin America”, I ran across obituaries for his distinguished parents, Ewan Clague (Ph.D. Wisconsin, 1929. Thesis: Theory and Measurement of Physical Productivity, major professors Commons & Jerome) and Dorothy V. Whipple (M.D. Johns Hopkins, 1929. Pediatrician, syndicated columnist). Not only was Christopher Clague’s father a trained economist, he also served as the sixth Commissioner of the Bureau of Labor Statistics under Presidents Truman, Eisenhower, Kennedy, and Johnson. I have appended short bios for his mother and father as well as for his wife, Harvard trained political scientist, Monique F. Clague (Weston).

But the top of the post is reserved for a brief c.v. of Christopher Karran Clague, Harvard Ph.D. alumnus (1966). Following the stations of his distinguished career, Economics in the Rear-view Mirror provides transcribed copies of his course outline, assigned readings and final examination.

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Christopher Karran Clague

1938. Born May 28 in Washington, D.C. Parents: Ewan Clague  and Dorothy Vermilya Whipple.

Graduate of St. Alban’s School in Bridgeport, Ct.

1960. B.A. in political science (honors), magna cum laude, Swarthmore College. Phi Beta Kappa, Senior Class President.

1960. Married Monique Françoise Weston, June 9 in Cleveland, Ohio.

1966. Ph.D. in Economics. Harvard University. Thesis “Economic Efficiency in Peru and the United States.”

1965-67. Instructor in Economics. Harvard University.

1967-68. Senior staff economist. Council of Economic Advisers, Washington, D.C.

1968-71. Assistant Professor. University of Maryland.

1971-79. Associate Professor. University of Maryland.

1974-75. Visiting professor at Boston University’s Center for Latin American Development Studies.

1979-. Professor of Economics. University of Maryland [now emeritus]

1983. Visiting Professor at the University of California, Berkeley.

1983-89. National Bureau of Economic Research, member of executive committee, Conference on Research in Income and Wealth.

1990. Visiting Professor at the University of Hawaii at Manoa.

1990. Visiting Professor at the University of Nottingham.

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Economic 116.
The Economy of Latin America

Dr. Christopher Clague
Harvard University

Course Outline.

  1. International Trade and Economic Development
    Case Studies: Argentina, Uruguay, Venezuela.
  2. Capital Accumulation; Social and Political Factors; Economic Policy: The Price Mechanism versus Direct Controls.
    Case Studies: Chile, Brazil.
  3. Agriculture in Economic Development; Land Reform
    Case Studies: Mexico, Bolivia, Peru, Colombia.
  4. Inflation

Suggested Purchases. The number of pages to be read in each book is given in parentheses.

  1. Gerald M. Maier, Leading Issues in Development Economics. New York: Oxford University Press, 1964. (63 pages)
  2. John J. Johnson, Political Change in Latin America. Stanford, California: Stanford University Press, 1961. (135 pages)
  3. Martin C. Needler, editor, Political Systems of Latin America. Princeton, New Jersey: D. Van Nostrand Company, 1964. (Chapters on Colombia, Peru, Bolivia, Argentina, Uruguay. 145 pages.)
  4. Edwin Lieuwen, Venezuela. 2nd Edition revised. New York: Oxford University Press, 1965 (122 pages)
  5. A. O. Hirschman, Journeys Toward Progress. New York: Doubleday and Company (Anchor Books, paperback), 1965. (Chapters on Colombia and Chile. 168 pages).
  6. Celso Furtado, The Economic Growth of Brazil. Los Angeles: University of California Press, 1963. (152 pages).
  7. Theodore W. Schultz, Transforming Traditional Agriculture. New Haven: Yale University Press, 1964. (110 pages).
  8. Albert O. Hirschman, editor, Latin American Issues. New York: Twentieth Century Fund, 1961. (paperback). (83 pages).
  9. Lester R. Brown, Increasing World Food Output, Foreign Agricultural Economic Report No. 25, U.S. Department of Agriculture, Economic Research Service, Foreign Regional Analysis Division, April 1965. (Can be purchased from: Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. Price $.45) (115 pages).
  1. International Trade and Economic Development
    1. The Contribution of Trade to Development
      1. — Meier, Leading Issues:
        — G. Haberler, “Dynamic Benefits of Trade”, pp. 352-358
        — R. Nurkse, “Patterns of Trade and Development”, pp. 358-363
        — A. Cairncross, “Contribution of Trade to Development”, pp. 363-371
        — R. Prebisch, “Center and Periphery”, pp. 339-344
        — G. Meier, “The Carry-Over Problem”, pp. 371-376
      2. — G. Haberler, “Terms of Trade and Economic Development”, in Howard S. Ellis, Economic Development for Latin America, pp. 275-297
    2. Case Studies of Trade and Development
      1. Argentina
        — Johnson, Political Change, Chapter 6.
        — J. Barager, “Argentina” in Needler, Political Systems.
        — A. Smithies, “Argentina and Australia”, American Economic Association Papers and Proceedings, May 1965, pp. 17-30.
        — S. Mosk, “Latin America and the World Economy, 1850-1914”, Inter-American Economic Affairs. (Hereinafter referred to as IEA), Winter 1948, pp. 53-82.

Suggested:
— UN, ECLA, Analyses and Projections of Economic Development: The Economic Development of Argentina.
— Arthur Whitaker, The U.S. and Argentina
— Aldo Ferrer, La Economia Argentina
— J. Black, “Observations on the Agriculture of Argentina”, Journal of Farm Economics, May 1957, pp. 468-477,

      1. Uruguay
        — Johnson, Chapter 4.
        — G. Lindahl, “Uruguay” in Needler.
      1. Venezuela
        — E. Lieuwen, Venezuela (1965 Edition), pp. 64-163, 177-200.
      1. Peru in the Guano Age
        — Jonathan V. Levin, The Export Economies, pp. 1-48, 77-91, 108-123.
  1. Capital Accumulation and Growth; Social and Political Policy: Price Mechanism versus Direct Controls.
    1. The Big-Push Theory
      1. — Meier, Leading Issues:
        — P. Rosenstein-Rodan, “The Theory of the ‘Big-Push,'” pp. 431-436.
        — R. Nurkse, “Balanced Growth”, pp. 250-254.
        — A. Hirschman, “Balanced Growth: A Critique”, pp. 254-259.

Suggested:
— E. Hagen, On the Theory of Social Change, Chapter 3, pp. 36-52.

    1. Political Obstacles to Growth
      1. — Paul Baran, “On the Political Economy of Backwardness”, in Agarwala and Singh, The Economics of Underdevelopment, pp. 75-93 (orginally in The Manchester School, January, 1952).
    2. Economic Policy: Price Mechanism versus Direct Controls
      1. — Meier, Leading Issues:
        — P. Rosenstein-Rodan, “The Flaw in the Mechanism of Market Forces”, pp. 416-18.
        — H. Johnson, “The Market Mechanism as an Instrument of Development”, pp. 425-431
        — G. Meier, “Import Substitution and Industrial Protection”, pp. 297-304.
      1. — T. Balogh, “Economic Policy and the Price System”, Economic Bulletin for Latin America, March 1961.
      2. — W. Baer, “The Economics of Prebisch and ECLA”, Economic Development and Cultural Change, January 1962, pp. 169-182 (hereinafter referred to as EDCC.)

Suggested:
— J. Marshall, “Exchange Controls and Economic Development”, in H. Ellis, ed., Economic Development, pp. 430-451; also comment by Hirschman, pp. 457-465.

    1. Case Studies:
      1. Chile
        — Johnson, Chapter 5.
        — David Felix, “Chile” in Adamantios Pepelasis et al, Economic Development, pp. 288-323.
        — Eric Baklanoff, “Chilean Experience with Multiple Exchange Rates”, IEA, Summer, 1959.
        — A. Hirschman, Journeys Toward Progress, Chapter 3, pp. 215-293.

Suggested:
— P. T. Ellsworth, Chile, An Economy in Transition (1945)
— Ernst Halperin, Nationalism and Communism in Chile (1965).

— See also the section on Inflation.

      1. Brazil
        — Johnson, Chapter 8.
        — H. Spiegel, “Brazil: The State and Economic Growth”, in Simon Kuznets et al, editors, Economic Growth: Brazil, India, Japan.
        — Celso Furtado, The Economic Growth of Brazil, pp. 97-249

Suggested:
— Other articles on Brazil in the volume edited by Kuznets.
— W. Baer, Industrialization and Economic Growth in Brazil (1965).
— W. Baer, “Regional Inequality and Economic Growth in Brazil”, EDCC, April 1964.

  1. The Role of Agriculture; Land Reform
    1. Agriculture and Economic Development
      1. — T. W. Schultz, Transforming Traditional Agriculture, pp. 1-110.
      2. — Johnston and Mellor, “The Role of Agriculture in Economic Development”, American Economic Review, September 1961, pp. 566-591.
      3. — J. Mellor, “The Process of Agricultural Development in Low-Income Countries”, Journal of Farm Economics, August 1962, pp. 700-17.
      4. — Thomas Carroll, “The Land Reform Issue in Latin America”, in Hirschman, Latin American Issues, pp. 161-200.
      5. — Lester Brown, Increasing World Food Output, pp. 1-115
    2. Case Studies
      1. Mexico
        — Johnson, Chapter 7.
        — Robert Edminster, “Mexico”, in Adamantios Pepelasis, Economic Development, pp. 326-364.
        — Raymond Vernon, The Dilemma of Mexico’s Development, Chapters 1-4; Chap. 7.
        — Richard Parks, “The Role of Agriculture in Mexican Economic Development”, IEA, Summer 1964.

Suggested:
—  A. Sturmthal, “Economic Development, Income Distribution, and Capital Formation in Mexico”, Journal of Political Economy, June 1955.
— R. Scott, Mexican Government in Transition, esp. pp. 56-95.

      1. Bolivia
        — Robert Alexander, “Bolivia”, in Needler

Suggested:
— Richard Patch, “Bolivia: U.S. Assistance in a Revolutionary Setting”, in Council on Foreign Relations, Social Change in Latin America Today, pp. 108-176

      1. Peru
        — Rosendo Gomez, “Peru”, in Needler
        — Allan Holmberg, “Changing Community Attitudes and Values in Peru: A Case Study in Guided Change” in Social Change (see reference under Bolivia), pp. 63-107.
      1. Colombia
        — J. Martz, “Colombia”, in Needler
        — A. Hirschman, Journeys Toward Progress, Chapter 2, pp. 131-214.

Suggested:
— V. L. Fluharty, Dance of the Millions, 1930-1956.
— J. D. Martz, Colombia, A Contemporary Political Survey.
— Everett Hagen, On the Theory of Social Change, Chapter 15 (on Colombia), pp. 353-385.
— UN, ECLA, Analyses and Projections of Economic Development, III. The Economic Development of Colombia (1957).

  1. Inflation
    1. Causal Theory of Inflation: Structuralists and Monetarists
      1. — Hirschman, Latin American Issues: articles by Felix and Grumwald, pp. 95-125.
      2. — Meier, Leading Issues: R. Prebisch, pp. 207-210.
    2. The Effects of Inflation and How to Combat It
      1. — Meier, Leading Issues:
        ECAFE, “Inflation and Capital Formation”, pp. 170-174.
      2. — W. Baer, “Inflation and Growth in Brazil”, EDCC, October 1962, pp. 85-97.
      3. — E. Bernstein and I. Patel, “Inflation in Relation to Economic Development”, IMF Staff Papers, November 1952.
      4. — R. Campos, “Inflation and Balanced Growth” in H. Ellis, ed., Economic Development, pp. 82-103.
      5. — G. Dorrance, “The Effect of Inflation on Economic Development”, IMF Staff Papers, March 1963, pp. 1-44.
      6. — D. Felix, “A Critical Appraisal of the Monetarist-Structuralist Controversy”, in W. Baer and I. Kerstenetsky, editors, Inflation and Economic Growth, pp. 370-385. (Do not bother with the last part of the article.)

Suggested:
Other articles in the volume edited by Baer and Kerstenetsky.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 9. Folder “Economics, 1965-1966 (1 of 2)”.

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Final Examination
Economics 116

June 4, 1966
Dr. Clague

Answer four questions.  Select one from each part.  (Those who have written papers may select four questions either from Parts I, II, and III, or from Parts I, II, and IV.)

I.
  1. Discuss one of the articles in the Reading Period assignment. Pick an article that you found especially interesting or significant.
    Add your own comments on the issue the author discusses.
  2. Which do you think are the most important valid arguments for tariff protection of industry in Latin American countries? Explain each argument in enough detail to make it evident that you understand it.
II.
  1. What are the obstacles to Chile’s exporting manufacturing products? Why might such exports be important for future economic growth?
  2. Discuss the Baran thesis in relation to Chile and Brazil in the twentieth century. To which country is it more applicable?  How have political alignments affected economic growth?
III.
  1. W. Schultz (in Transforming Traditional Agriculture) argues that peasants in traditional agriculture are thrifty, hardworking, and economically motivated. Yet they fail to adopt the new practices that would make their farms much more productive.  How does he reconcile these two propositions?  Do you agree?
  2. You are an economic adviser to President Belaunde Terry of Peru. He asks you to write a memorandum on land reform policy.  In particular, he wants to know what lessons, of relevance to Peru, might be drawn from the experience with land reform of Mexico, Bolivia, and Colombia.
    President Belaunde is interested in the growth of Peru’s per capita income, the welfare of the peasants, and his continuance in power.
IV.
  1. Explain how inflation could be used by the government to increase the rate of capital formation. What are the arguments against such a policy?
  2. Consider the following two propositions:
      1. Inflation is inevitable in an underdeveloped country that is attempting to industrialize.
      2. It follows from (i) that monetary stabilization programs, such as those proposed by the International Monetary Fund, are doomed to failure.

To what extent do you agree with each of these statements?

Source: Harvard University Archives. Harvard Faculty of Arts and Sciences. Papers Printed for Final Examinations in History, History of Religions, Government, Economics,… June 1966.

Image Sources: Ewon Clague portrait from The First Hundred Years of the Bureau of Labor Statistics by Joseph P. Goldberg and William T. Moye. September 1985, Bulletin 2235. Senior year portrait of Christopher K. Clague in the Swarthmore yearbook Halcyon 1960.

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Father: Ewan Clague

Born Dec. 27 1896 in Prescott, Washington. He married Dorothy Vermilya Whipple on June 14, 1924 in Milwaukee, Wisconsin. He died in April 12, 1987.

Ewan Clague, born in Prescott, Washington in 1896, was the sixth Bureau of Labor Statistics Commissioner. His education included the University of Washington and, after serving as an ambulance driver in World War I, the University of Wisconsin. Clague’s teacher, John R. Commons, recommended him to Commissioner Ethelbert Stewart, who hired Clague in 1926 to help develop productivity indexes. After finishing his project at the Bureau, Clague moved on to several other jobs, including working at the Metropolitan Life Insurance Company, studying the effects of mill closures for the Institute of Human Relations at Yale University, and serving as director of research and professor of social research at the Pennsylvania School of Social Work. In 1936, he was hired as Associate Director of Research and Statistics of the new Social Security Board, and was subsequently promoted to Director. In 1940, he became Director of the Bureau of Employment Security. When Clague was appointed Commissioner of the Bureau of Labor Statistics in 1946, he came to the office as a trained economist and experienced civil servant. [Retired from office on September 14, 1965 during his fifth term as Commissioner]

Source: https://www.bls.gov/bls/history/commissioners/clague.htm

 

Mother: Dorothy Vermilya Whipple

Born November 22, 1900 in Toledo Ohio. Died May 5, 1995 in Washington, D.C.

Speed skater at the University of Wisconsin, where she earned her B.A. and M.A. First married woman admitted to Johns Hopkins Medical School (M.D., 1929). Pediatrician. Published Our American Babies (1944). Most of the revisions in the 1942 Federal pamphlet Infant Care  were prepared by her and Dr. Marian M. Crane. Syndicated weekly newspaper column on child care. Two other books: Euthenic Pediatrics and Q: Is the Grass Greener? Answers to Questions About Drugs (1971).

Obituary by David Stout in the New York Times, May 8, 1994.

Wife: Monique Françoise Weston

Born March 5, 1937 and grew up in Shaker Heights, Ohio. Graduated Shaker Heights High School, Ohio, 1955. College Junior year abroad at the London School of Economics in 1957-58. B.A. magna cum laude in Political Science at Swarthmore 1959, Phi Beta Kappa. Woodrow Wilson Fellowship for graduate study at Columbia University. Ph.D. Harvard 1969. Thesis: Heroic Leadership and Legalism: The Case of De Gaulle’s Légalité.” Professor of Education Policy, Planning, Administration at the University of Maryland [now emerita].

Categories
Exam Questions Harvard Public Finance

Harvard. Advanced Public Finance. Description, enrollment and final examination. Bullock, 1912-1913

Wealth of Nations, Book V, Part II, Chapter II

Adam Smith appears in eight of the seventeen semester examination questions for Charles Jesse Bullock’s course on comparative public finance in 1912-13.

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Earlier Advanced Public Finance

Links to earlier course material for advanced course in public finance from Harvard, 1905-06 through 1911-12.

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ECONOMICS 31
Course Description
1912-13

[Economics] 31 (formerly 16). Public Finance. Mon., Wed., and (at the pleasure of the instructor) Fri., at 10. Professor Bullock.

The course is devoted to the examination of the financial institutions of the principal modern countries, in the light of both theory and history. One or more reports calling for independent investigation will ordinarily be required. Special emphasis will be placed upon questions of American finance. Ability to read French or German is presupposed.

Source: Harvard University. Division of History, Government, and Economics, Courses of Instruction, 1912–13, p. 67.

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ECONOMICS 31
Course Enrollment
1912-13

[Economics] 31 (formerly 16). Professor Bullock. — Public Finance.

Total 7: 6 Graduates; 1 Junior.

Source: Harvard University. Reports of the President and the Treasurer of Harvard College, 1912-13, p. 58.

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ECONOMICS 31
Mid-year Examination
1912-13

  1. In estimating the pressure of public expenditures what considerations need to be taken into account?
  2. State and discuss the so-called laws of the increase of public expenditures.
  3. Discuss critically Smith’s, Wagner’s, Cohn’s, and Seligman’s classifications of public revenues.
  4. In what branches of expenditures may a decrease be expected either immediately or ultimately? Give reasons.
  5. Compare the opinions of Smith and Bastable concerning revenue from domains.
  6. Compare the opinions of Smith and Mill concerning justice in taxation.
  7. Compare the opinions of Smith and Mill concerning the best system of taxation for Great Britain.
  8. What is the opinion of Leroy-Beaulieu concerning the present and future of revenues from (a) domains, (b) public industries?
  9. What is the opinion of Eheberg concerning the present and future of revenues from (a) domain, (b) public industries?

Source: Harvard University. Mid-year examinations, 1852-1943. Box 9, bound volume Examination Papers, Mid-Years 1912-13. 

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ECONOMICS 31
Year-end Examination
1912-13

  1. How far does the present British system of taxation conform to the maxims of Adam Smith?
  2. How far does the present French system of taxation conform to Smith’s maxims?
  3. How far does the present Prussian system of taxation conform to Smith’s maxims?
  4. How far would the single tax on land values conform to Smith’s maxims?
  5. Compare the general property tax in Switzerland with the same tax in the United States.
  6. What changes in the general property tax have occurred in the United States in recent years?
  7. Discuss fully the opinions of Leroy-Beaulieu or Eheberg concerning the income tax.
  8. Discuss fully the opinions of Leroy-Beaulieu or Eheberg concerning the inheritance tax.

Source: Harvard University Examinations. Papers set for final examinations in history, history of science, government, economics, philosophy, social ethics, education, fine arts, music in Harvard College (June 1913), pp. 55-56.

Image Source: Beginning of Chapter II, Part II of Book V of Adam Smith’s Wealth of Nations. This is where to find Smith’s four maxims on taxation.

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Earlier Advanced Public Finance Courses

1905-06. Public Finance (advanced course).
1908-09. Public Finance (advanced course).
1910-11. Public Finance (advanced course).
1911-12. Public Finance (advanced course).

Categories
Exam Questions Harvard Public Finance Suggested Reading Syllabus

Harvard. Public Investment. Description, enrollment, exam. Marglin et al. 1966-1967

The scope of this interdisciplinary course from the mid-1960s is genuinely breathtaking. With his Harvard Ph.D. (1965) still fresh [Thesis: “Decentralized Resources Allocation With a Modicum of Increasing Returns.”], Stephen Marglin was on his famed meteoric rise to tenured professorship when he co-taught the following course on public investmen with political scientists and civil engineers.

For a later observation on his intellectual journey, see the brief profile article in The Harvard Crimson (14 November 2019) on “The Black Sheep of Harvard Economics” from which the image above has been clipped. He’s come a long way.

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Course Announcement

Economics 112 (formerly Government 257a). Public Investment: Techniques for Relating Economic Objectives, Engineering Analysis, and Government Planning (Offered Jointly with the Graduate School of Public Administration)

Half course (fall term). Th., 2-4, and a two-hour meeting to be arranged.
Assistant Professor S. Marglin and Professors Arthur Maass and H. A. Thomas.

New methods of economic, engineering, and governmental analysis in public investment planning. Techniques include those for converting broad community objectives into specific criteria used to design public projects. Emphasis on systems analysis.

Source:  Harvard University, Faculty of Arts and Sciences. Courses of Instruction for Harvard and Radcliffe, 1966-1967, p. 110.

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Course Instructors

Stephen Alan Marglin (1938- ) Assistant Professor of Economics.

Arthur Aaron Maass (1917-2004), Frank G. Thomson Professor of Government.

Harold A. Thomas, Jr. (1913-2002), Gordon McKay Professor of Civil and Sanitary Engineering.

Peter P. Rogers (1937-2018) (Ph.D. in Engineering 1966) Lecturer in Systems Analysis in the Graduate School of Design and a research associate in the Center for Population Studies.

George Herman Quester (1936-2023), Instructor of Government.

Henry D. Jacoby (1935-), Harvard economics Ph.D. 1967. Instructor of Economics.

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Fall Term
1966-67

Economics 112

PUBLIC INVESTMENT: TECHNIQUES FOR RELATING ECONOMIC OBJECTIVES, ENGINEERING ANALYSIS, AND GOVERNMENT PLANNING.

Assistant Professor S. Marglin, Professors A. Maass and H. A. Thomas, Drs. P. Rogers and G. Quester, and Mr. H. Jacoby.

Course Outline

A.    Formulating Public Investment Criteria Date
1. Introduction SM Sep. 29
2. Production and the Theory of the Firm HJ Oct. 4
Objectives: National Income and Its Distribution SM Oct. 6
3. Consumption and the Theory of the Household HJ Oct. 11
Selection of the Unit of Analysis and the Definition of Benefits and Costs HJ Oct. 13
4. Intertemporal Criteria HJ Oct. 18
Interest Rates and Uncertainty SM Oct. 20
5. Markets, Economic Efficiency and Welfare HJ Oct. 25
The Design Process: Methods of Analysis and Problems of Measurement HJ Oct. 27
B.     Objectives of Public Investment
1. Alternative Concepts of the Public Interest GQ Nov. 1
Multiple Objectives in Public Investment Programs AM Nov. 3
2. Concepts of Decision Making GQ Nov. 8
The Weighting of Objectives in the Political Process AM Nov. 10
C.     Applying Criteria in Project Design
1. The Mathematics of Optimization PR Nov. 15
Mathematical Models: Deterministic Models HAT Nov. 17
2. The Techniques of Systems Analysis PR Nov. 22
(To be announced) Nov. 29
Mathematical Models: Stochastic Models HAT Dec. 1
3. Computation Laboratory PR Dec. 6
Simulation HAT Dec. 8
(To be announced) Dec. 13
D.    Summary and Conclusions All Dec. 15
Problem Sets

Problem set #1 is due on November 1.
Problem set #2 is due on December 1.
Problem set #3 is due on January 12.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 9, Folder “Economics, 1966-1967”.

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Fall Term
1966-67

Economics 112

PUBLIC INVESTMENT:
TECHNIQUES FOR RELATING ECONOMIC OBJECTIVES, ENGINEERING ANALYSIS, AND GOVERNMENT PLANNING.

Reading List

Recommended for purchase:

Maass, Hufschmidt, Dorfman, Thomas, Marglin, Fair, Design of Water-Resource Systems (1962).

All other readings on Reserve at Littauer or Lamont Libraries
Optional readings are starred

Readings for October 4:

P. Samuelson, Economics (4th or 5th edition), Chapters 24 & 26 (including appendices).

R. Dorfman, The Price System, Chapters 1 & 2 (1964).

Readings for October 6:

K. Boulding, “The Economist and the Engineer: Economic Dynamics of Water Resource Development,” in S. Smith and E. Castle (eds.) Economics and Public Policy in Water Resource Development (1964).

W. Heller, “Reflections on Public Expenditure Theory,” in Edmund Phelps, ed., Private Wants and Public Needs(1962).

J. Krutilla and O. Eckstein, Multiple Purpose River Development, Chapter 2 (1958).

J. Krutilla, “Welfare Aspects of Benefit-Cost Analysis,” 69 Journal of Political Economy 226-235 (1961).

S. Marglin, Public Investment Criteria, pp. 1-36 (1965).

Readings for October 11:

R. Dorfman, The Price System, Chapter 3 (1964).

T. Scitovsky, Welfare and Competition, Chapter IV, pp. 51-65 (1951).

Readings for October 13:

S. Marglin, Public Investment Criteria, pp. 37-46, 91-100 (1965).

R. Haveman, Water Resource Investment and the Public Interest, Chapters 3, 4, 5 (1965).

J. Tinbergen, The Design of Development, pp. 36-41, 76-87 (1958).

*Maass, Hufschmidt, et. al., Design of Water-Resource Systems, pp. 40-87 (1962).

Readings for October 18:

P. Samuelson, Economics (4th or 5th edition), Chapter 29 (including appendix).

I. Fisher, The Theory of Interest, Chapters V & VI (1930).

H. Bierman and S. Smidt, The Capital Budgeting Decision, Chapters 2 & 3 (1960).

Readings for October 20:

S. Marglin, Public Investment Criteria, pp. 46-77 (1965).

J. Krutilla and O. Eckstein, Multiple Purpose River Development, Chapter 2, pp. 32-40, and Chapter 4 (1958).

R. McKean, Efficiency in Government Through Systems Analysis, Chapter 4 (1958).

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, pp. 129-158 (1962).

J. Hirshleifer, “Efficient Allocation of Capital in an Uncertain World,” 54 AER 77-85 (1964), and comment by P. Samuelson, 95-96.

*J. Hirshleifer, “Investment Decision Under Uncertainty — Choice-Theoretic Approaches,” 79 QJE 509-536 (1965).

*J. Hirshleifer, “Investment Decisions Under Uncertainty: Applications of the State-Preference Approach,” 80 QJE 252-277 (1966).

Readings for October 25:

P. Samuelson, Economics (4th or 5th edition), pp. 678-689.

R. Dorfman, The Price System, Chapters 4-6 (1964).

J. Graaff, Theoretical Welfare Economics, Chapters 1-3 (1957).

Readings for October 27:

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, Chapter 3, pp. 88-118, and Chapter 5 (1962).

J. Rothenberg, “Urban Renewal Programs” in R. Dorfman, ed., Measuring Benefits of Government Investments(1965). Also skim the other articles in this collection.

Readings for November 1:

C. Friedrich, Constitutional Government and Democracy, Chapter 14.

R. Dahl and C. Lindblom, Politics, Economics and Welfare, pp. 25-56.

A. Downs, An Economic Theory of Democracy, pp. 3-74, 279-300.

Madison, The Federalist, No. 10.

D. Truman, The Governmental Process, Chapters 1, 2, 12 & 16.

Readings for November 3:

Maass, “Benefit-Cost Analysis: Its Relevance to Public Investment Decisions,” 80 QJE 208-226 (1966). Readpp. 208-218.

R. Musgrave, “The Public Interest: Efficiency in the Creation and Maintenance of Material Welfare,” Chapter 9 in Nomos 5: The Public Interest, C. Friedrich, ed. (1962).

G. Colm, “The Public Interest: Essential Key to Public Policy,” Chapter 10 in Nomos 5 (1962).

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, Chapter 15 (1962).

C. Lindblom, “Decision-Making in Taxation and Expenditures” and Comments by A. Bergson and G. Colm, in Public Finances: Needs, Sources and Utilization (NBER Conference) pp. 295-336 (1961).

Readings for November 8:

R. Dahl and C. Lindblom, Politics, Economics, and Welfare, pp. 57-88, 294-368.

A. Downs, An Economic Theory of Democracy, pp. 114-163, 260-276.

E. Banfield, Political Influence, Chapter 12.

Readings for November 10:

A. Maass, “Benefit-Cost Analysis: Its Relevance to Public Investment Decisions,” 80 QJE 208-226. Read pp. 218-226.

D. Major, Decision Making for Public Investment in Water Resources Development, Chapters 2 & 6 (1965).

S. Dola, Passaic Valley Flood Control, mimeo (1965).

Readings for November 15:

R. Dorfman, “Mathematical or ‘Linear’ Programming: A Non-Mathematical Exposition,” 43 AER 797-825 (1953).

G. Hadley, Linear Programming, Chapter 1, pp. 1-21 (1962).

S. Gass, Linear Programming (2nd edition), Chapter 1, pp. 3-19 (1964).

*J. Henderson and R. Quandt, Microeconomic Theory, Appendices A2 & A3 (1958).

*P. Rogers, “A Note on Maximization,” mimeo (1964).

Readings for November 17:

H. A. Thomas and R. Revelle, “On the Efficient Use of High Aswan Dam for Hydropower and Irrigation,” in Management Science, Vol. 12, No. 8 (1966).

R. Dorfman, “Mathematical Analysis: Design of the Simple Valley Project,” in G. S. Tolley and F. E. Riggs (eds.) Economics of Watershed Planning (1960).

D. Kendrick, “Programming Investment with Interdependent Projects,” Center for International Studies, M.I.T., mimeo, pp. 1-16 (Jan. 1966).

Readings for November 22:

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, Chapter 3, re-read pp. 129-158, and Chapter 12 (1962).

J. Kemeny and J. Snell, Mathematical Models in the Social Sciences, Appendix C, pp. 128-131.

*G. Hadley, Nonlinear and Dynamic Programming, Chapter 10, pp. 350-375 (1964).

*J.D.C. Little, “The Use of Water Storage in a Hydroelectric System,” J. Oper. Res. Soc. Am. 187 (1955).

*P. Massé, Optimal Investment Decisions, Chapter 7, pp. 320-335 (1962).

Readings for December 1:

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, Chapter 13, pp. 524-539, and Chapter 14 (1962).

M. B. Fiering, “The Nature of the Storage-Yield Relationship,” Symposium on Streamflow Regulation for Quality Control, U.S.D.H.E.W., pp. 243-253 (June 1965).

Readings for December 6:

R. Fano and F. Corbató, “Time Sharing on Computers,” in Scientific American, Sept. 1966, pp. 128-148. Also flip through other articles in this issue.

Readings for December 18:

Maass, Hufschmidt, et. al., Design of Water-Resource Systems, Chapter 10 (1962).

G. Orcutt, “Simulation: A Symposium,” 50 AER 893-907 (1960).

G. Orcutt et. al., Microanalysis of Socioeconomic Systems, Chapters 1, 2 & 14 (1961).

M. Hufschmidt and M. B Fiering, Simulation Techniques for Design of Water-Resource Systems, Chapter 2 (1966).

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003, Box 9, Folder “Economics, 1966-1967”.

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HARVARD UNIVERSITY
Department of Economics

Final Examination
Economics 112

February 1, 1967

Answer any four of the following six questions.  All questions are of equal weight.  Please place each of your answers in a separate bluebook, and put your name on the cover of each book.

  1. “If lump sum transfers were administratively feasible, governments would be well advised to plan all investments to maximize profits, counting profits in the same way that private enterprise does.”
    Comment in the light of income redistribution and merit-want objectives, market imperfections (such as monopoly) and other considerations you think relevant.
  1. “If the government’s social rate of interest based on time preference differs from the marginal productivity of investment in the private sector, it is wrong to use the social rate of interest to plan public investment. The error arises from the fact that using the social rate of interest precludes the government from taking into account the value of private alternatives to public investment.”
    Comment.
  1. The problem is to compare and evaluate two ways of designing and authorizing public works projects:

(1) There are no useful legislated standards, so that engineers must use their engineering judgment for design. Projects so designed are then considered by policy makers (President and Congress) for inclusion in omnibus authorizing bills.

(2) Policy makers initiate, debate, and adopt standards for design of projects.  Engineers design them, and any projects that conform to the standards are considered to be authorized.

Assume that partisan mutual adjustment is the criterion for comparing and evaluating the two design methods — i.e., that “bargaining is at the heart of the governmental process.”  Compare and evaluate the design methods using the criterion given.

Evaluate the utility of partisan mutual adjustment as the evaluative criterion for this specific problem.

  1. Economists assume that the individual behaves selfishly on issues relevant to his monetary income; yet they ask political scientists to define an explicit public interest function as if such a function were of more than academic significance for participants in the legislative process.Is this inconsistent, or is there some political value to specifying an explicit public interest to be contrasted with the personal preferences of individuals?
  1. “Simulation methods are more useful for the planning of large scale public investment projects than the analytic methods of mathematical programming.”
    Discuss this statement and give your reasons for agreeing or disagreeing with it.
  1. The following simple model of a water resource system involves two reservoirs and two uses.One use is for domestic water supply for which no monetary benefit function is available but a water requirement is specified; the other use is one for which there is a direct market value.

The two reservoirs are shown in the sketch together with outflow vectors.  The outflow from Reservoir A can only be used for meeting the water supply requirement.  The outflow from Reservoir B can be routed to either or both uses.  All flows are assumed to be non-stochastic.  The following cost and benefit functions are assumed:

cost function for reservoir A                C1 = a+x2 dollars,

cost function for reservoir B                C2 = b+½(y+z)2 dollars,

benefit function for other use               B = pz dollars,

where

x = safe yield of reservoir A,

y = portion of safe yield of reservoir B diverted to municipal supply,

z = portion of safe yield of reservoir B diverted to other use,

p = price per unit of flow to other use, and

a,b = the given constants.

The municipal water requirement is

R = x+y .

The problem is to find the sizes of x, y and z which maximize the net economic benefits of the system subject to the water supply constraint.  Write the Lagrangean function for the constrained optimization and indicate how you could find the optimal design of the system and the marginal imputed value of municipal water supply.

Would the design be different if we merely asked for a least cost design?

Source: Harvard University Archives. Papers Printed for Mid-Year Examinations. History, History of Religions, Government, Economics, …. January 1967.

Categories
Exam Questions Harvard Methodology

Harvard. Graduate Economic Theory, Scope and Methods. Carver, 1912-1913

He who can, does; he who cannot, teaches; he who cannot do or teach, teaches methodology. Just kidding…Professor Thomas Nixon Carver taught just about everything in the Harvard economics department except for economic history, money and banking, public finance, and international trade. Economic theory, agricultural economics, distribution, social policy, sociology, and scope/methods were all in his teaching portfolio.

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Links to previous Harvard exams methods and scope of economics
1895-96 to 1907-08.

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Economics 12
Course Description
1912-13

[Economics] 12 1hf. (formerly 13). Scope and Methods of Economic Investigation. Half-course (first half-year). Hours to be arranged with the instructor. Professor Carver.

Course 12 will examine the methods by which the leading writers of modern times have approached economic questions, and the range which they have given their inquiries; and will consider the advantage of different methods, and the expediency of a wider or narrower field of investigation. Methods of reasoning, methods of investigation, and methods of exposition will be considered separately. Selected passages from the works of a considerable number of writers will be studied, with a view to analyzing the nature and scope of their reasoning.

Source: Harvard University. Division of History, Government, and Economics, Courses of Instruction, 1912–13, p. 64.

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Economics 12
Course Enrollment
1912-13

Economics 12 lhf (formerly 13). Professor Carver. Scope and Methods of Economic Investigation.

Total 3: 2 Graduates, 1 Radcliffe.

Source: Harvard University. Reports of the President and the Treasurer of Harvard College, 1912-13, p. 57.

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ECONOMICS 12
Mid-year Examination
1912-13

  1. Explain verbally, and show by means of an outline, the relation between private and public economics and the main subdivisions of each.
  2. Into what main departments would you subdivide the subject of economics if you were going to write a general text book for college classes. Give your reasons.
  3. What are the characteristic methods of reasoning, methods of collecting information, and methods of exposition in economics? Mention examples, or give illustrations of each. What are the special advantages of each? To what class of problems is each especially adapted?
  4. Comment upon the following: —

“The economist may thus be considered at the outset of his researches as already in possession of those ultimate principles governing the phenomena which form the subject of his study, the discovery of which in the case of physical investigation constitutes for the inquirer his most arduous task; but, on the other hand, he is excluded from the use of experiment.” (Cairnes, pp. 89-90.)

  1. What, according to Warner, are the characteristic methods of determining the causes of poverty? What are the merits and defects of each method? Give illustrations.
  2. Comment upon the statement that “political economy depends more upon reasoning than on observation.” Is this the same as saying that the greatest present need is for sound reasoners rather than for close observers? Would either statement apply to all possible conditions and to all classes of problems?
  3. Discuss Clark’s reasons for describing capital as a sum of money.

Source: Harvard University. Mid-year examinations, 1852-1943. Box 9, bound volume Examination Papers, Mid-Years 1912-13.  Also published in: Harvard University Examinations. Papers set for final examinations in history, history of science, government, economics, philosophy, social ethics, education, fine arts, music in Harvard College(June 1913), p. 53.

Image Source: Portrait of Thomas Nixon Carver (colorized by Economics in the Rear-view mirror) from The Harvard Album 1913.

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Exams from other years

Economics 13 (Scope and Methods) in 1895-96, Taussig.

Economics 13 (Scope and Methods) in 1896-97, Not Offered.

Economics 13 (Scope and Methods) in 1897-98, Ashley.

Economics 13 (Methods) in 1898-99, Taussig.

Economics 13 (Methods) in 1899-1900, Not Offered.

Economics 13 (Methods) in 1900-01, Carver.

Economics 13 (Methods) in 1902-03, Carver.

Economics 13 (Methods) in 1903-04, Carver.

Economics 13 (Methods) in 1904-05, Carver.

Economics 13 (Methods) in 1905-06, Not Offered.

Economics 13 (Methods) in 1906-07, Not Offered.

Economics 13 (Methods) in 1907-08, Carver.

Economics 13 (Methods) in 1908-09, Not Offered.

Economics 13 (Methods) in 1909-10, Not Offered.

Economics 13 (Methods) in 1910-11, Not Offered.

Economics 13 (Methods) in 1911-12, Carver (Exam not found).

Economics 12 (Scope and Methods) in 1914-15. Carver.

Categories
Keynesian Economics Macroeconomics Washington University

Washington University. Case for McGovern’s Economic Policies. Minsky, 1972

The following manuscript was fished from Abba Lerner’s papers. The cover letter indicates that Hyman Minsky was going to be heading East for the Southern Economics Association meetings and was hoping to combine that with the search for new graduate students for Washington University and a bit of self-promotion of his support for the McGovern Presidential campaign. Minsky summons his inner-Joan-Robinson here.

In an earlier post we have unpublished scraps for the 1977 review by Lerner of Minsky’s Keynesian economics.

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WASHINGTON UNIVERSITY
ST. LOUIS, MISSOURI 63130

October 5, 1972

DEPARTMENT OF ECONOMICS

Professor Abba P. Lerner
Department of Economics
Queens College
Queens, New York

Dear Abba:

Enclosed you find my contribution in kind to the McGovern campaign. I would appreciate your views on my two lessons from The General Theory. I know there is a bit of Joan Robinson in it.

I am also enclosing the brochure we put out in an attempt to recruit graduate students. Our department is trying to improve the quality but not the quantity of our graduate students. In order to do this we feel we should try to get applications from schools where we have not been getting students. Queens College is one such place. One thing we are doing in this effort is to have members of our faculty visit these colleges in an effort to arouse faculty awareness and student interest.

I will be east for the SEA meetings and I have been thinking I will follow that up with a trip to New York, during which I would hope to be able to come up to Queens University and talk to you, your colleagues and students about the attractions of graduate work in Economics at Washington University. Let me know what you think of the feasibility of such a visit.

My best regards to Dahlia. Esther sends her love.

Sincerely,
[signed]
Hyman P. Minsky
Professor

HPM:ef
enclosures

____________________________

Economic Issues in 1972: A Perspective

By Hyman P. Minsky
Professor of Economics
Washington University

A Presentation to a Symposium on The Economics of the Candidates sponsored by the Department of Economics of Washington University, St. Louis, Missouri, October 6, 1972.

In 1972 the American people have a clear choice between economic purpose and economic drift. The great purpose of the American Revolution was and remains the creation of a society of free and equal men. In the past decades we have lost our direction. This year George McGovern is calling for us to come home again; McGovern is calling for an economic policy that will make the American Dream a reality.

The Lessons of Keynes

The great work that transformed economics into a policy science is Keynes’ General Theory. This work was published in 1936.

There are two lessons in Keynes’ General Theory. The first is that the economy can be managed so that depressions and serious unemployment do not take place: that is, full employment can be achieved and maintained. The second lesson is that once this is done the major economic policy issues become what type of output is going to be produced and for whom is it going to be produced: Income distribution and the contribution that economics can make to the quality of life are now the economic policy issues.

McGovern’s economics are in response to the second lesson; the first lesson is taken for granted. McGovern is calling for two policy thrusts: the benefits from production and the payoffs from economic growth are to be distributed more fairly than in the past, and the quality of life is to be improved as useful public goods replace the waste of ever increasing military expenditures.

It took the Democrats some 25 years to learn and accept the first lesson from Keynes. As a result the Kennedy-Johnson years were uninterrupted by anything that the official score keeper, the National Bureau of Economic Research, could call a recession. However, the Democrats in the 1960’s had not as yet learned the second, distribution and quality, lesson from Keynes. As a result the full employment of Kennedy-Johnson was achieved with the help of unfortunate tax changes which mainly benefited the well to do. The quality of life was adversely affected — to say the least — by the engagement in Viet Nam.

Nixon’s Recession

Aside from my comrade on this platform, Republicans are just naturally slower to learn than Democrats. When the unfortunate succession of Nixon to the presidency took place, the Republican leaders and policy advisors – Mr. Weidenbaum excepted – had not as yet assimilated the first lesson from Keynes. Therefore, while promising to take the inflationary pressure off of prices by a budget that is balanced and an even handed monetary policy, the Republicans succeeded in flinging the country into a full fledged recession; a rather protracted though not deep recession took place during 1970 and 71.

This experiment in “even handedness” was and remains expensive. In 1969 – when Nixon took office – unemployment was 3.5% of the labor force; in 1971 it was 5.9% – some 2.5% difference. A rule of thumb, used by economists to measure the output lost by unemployment, is that 3% of output is lost for every 1% excess of unemployment over full employment. By this rule, 1971’s full employment output was some 7.5%, more than $75 billion, greater than actual output. We the people – but most especially those who experienced this unemployment – paid a high price for the slowness of Republicans to learn.

Unemployment is the cruelest and most regressive form of taxation. It falls most heavily on those least able to pay. Nixon’s recession of 70-71 was unnecessary, it was a result of deliberate policy, and it made our poor, poorer.

Finally about a year ago the Republicans seem to have caught onto the first lesson. I believe at some point Mr. Nixon said that he was now a Keynesian.

Equity and the Quality of Life

Meanwhile within the Democratic Party, and in the economic policies of Senator McGovern, the second lesson of The General Theory was being assimilated. The McGovern objective is to develop policy instruments which transform the G.N.P. production machine into a more effective instrument for achieving equity in income distribution and for improving the quality of life.

The Republicans of course have no explicit policy toward income distribution and the quality of life. However we can infer their biases from positions taken. Republicans seem wedded to two propositions: Defense expenditures are sacred and the rich must get richer, so that their consumption can increase by 20% per head every five years.

Under Nixon and Laird the Defense budget is sacred, not just at its present level, but as a growing parasitic virus. It is my understanding that current projections call for a defense establishment that costs $100 billion within a few years. Republicans seem to be Leninists in the way they view the American economy. They seem to believe that wars, preparations for wars, and imperialist ventures are necessary if the American economy is to avoid crises and depressions.

The Republican Governor of Illinois attacked the McGovern defense budget because it will cause a loss of 40,000 jobs in Illinois. In this Republican model military expenditures are a boondoggle, but a good boondoggle. In the Republican view defense expenditures are to make jobs – and perhaps to take care of favorite firms, such as Lockheed, when they are in trouble. Defense expenditures are not undertaken by Republicans to defend the country against foreign foes.

A rational defense policy could certainly cut the 7% surcharge that defense levies on all output. Rich Japan and rich Germany do not spend 7% of their national income on defense. As an interim goal, I suggest the Military Brass should be rationed to 5% of G.N.P.. This would currently make $20 billion a year available for useful purposes.

Nixon’s Idea of Fairness

In the Economic Report of the President for 1970, Nixon’s Council of Economic Advisors engaged in an exercise on the “Future National Output and the Claims Upon It.” This exercise projected gross national product in 1975 and what would be done with it. The largest single claim upon Gross National Product is private “consumption.” Nixon’s council assumes that private consumption will grow at 3.25% per capita per year across the board. Nixon’s economists, when projecting consumption six years down the pike, blithly assume that it is just as worth while to use scarce resources to increase the personal consumption standard of a representative upper income family (now consuming at a rate in excess of $15,000 per person per year) by 20% over 6 years as it is to use resources so that the consumption standard of a representative poor or low income family – now consuming at a rate of $770 per person per year – increases by 20%.

Constraint upon the growth of upper income consumption will enable us to save some 5% of consumption expenditures as projected for 5 years hence; some $35 billion of resources can be freed by doing this. Thus McGovern’s economics will make available some $130 billion ($75 billion from the slack in the economy in 1971, $20 from defense and $35 billion from stabilizing the consumption of the rich) of wasted or misallocated resources which can be shifted to public purposes.

Let us look at the distribution of income and consumption, in a very rough and ready way. About 5% of the population lives in families with incomes above $25,000 per year. This 5% does about 25% of the total private consumption. The bottom 20% of the population in income does about 5% of the private consumption. A representative person in the top 5% consumes at the rate of $15,420 per year; a representative person in the bottom 20% consumes at the rate of $771 per year.

I personally believe it very worth while to raise the $771 as quickly as feasible. I do not believe it is worth very much to raise the affluent from $15,000 to $18,000 per year. In Nixon’s economics the two are equally worthy. The thrust of McGovern’s suggestions on taxation and employment is toward improving the distribution of consumption growth so that the lot of the poor and low income recipients improve relative to that of the opulent and the rich.

Policy For Equity

How can the distribution of income be improved? First of all by full employment. Sustained full employment will tend to raise low wages relative to high wages. The Republicans are moving toward redefining full employment so that 5% unemployment rate is labeled full employment. In this way Nixon’s sales force will be able to call recessions prosperity. Such high unemployment rate will widen the gap in wages.

Full employment is a 3.5% measured unemployment rate. The policy problem is to achieve and sustain a 3.5% unemployment rate without an inflationary rise in prices and wages. To do this, given the structures of product and labor markets, price, profit, and wage guidelines are necessary. Instead of standing idly by when contracts for high wage employees that call for 30% to 50% rise in wages over two or three years are negotiated – as Nixon did in 1969 and 1970 – guidelines limiting those wages which are substantially above the median income level to modest ‘productivity’ increases are necessary when labor markets are fully employed.

Given the cartelized nature of much of industry and the slowness of anti-trust procedures, effective profit and price constraints will have to accompany tight full employment.

However the tight full employment of the past was inefficient from the point of view of income equity and inflation. Demand was pumped in for defense, space, medicine and education. Demand increases started with high income specialists and then trickled down to the lower income workers. The direct employment of the unemployed in public service jobs – an employment program that takes the unemployed as they are and tailor makes jobs to their skills – has a much smaller inflationary bias than programs that first give tax rebates to the rich and then hopes they spend to create employment.

A word about poverty in America. Our poverty is only in part due to low private incomes. A good part is due to the low standard of the income the poor and those of modest income receive from public services in schools, hospitals, public safety, parks, etc. Given the unemployment rate in East St. Louis, in a rational and humane society, East St. Louis should have the safest and cleanest streets and parks, the largest number of teacher’s aides per teacher, the greatest number of nurse’s aides and orderlies per patient, etc….. But instead of looking at unemployment and underemployment as defects of the system, the Nixon’s of this world treat being unemployed as being either sick or evil; hence the demagogue talks about workfare as against welfare.

The second way to affect income distribution – an adjunct to employment policy and controls – is by way of taxation. There is no need to document the complexity and the blatent unfairness of our tax structure. A tax system based primarily on a straight forward progressive income tax is necessary. McGoverns’ proposals are bargaining chips in the right direction.

McGoverns’ economic proposals, therefore, by achieving useful employment for all, equity in taxation, and the elimination of waste in defense will truly tend to make all but the tax evader and the inside operators better off. The lot of the poor and those with modest incomes will be improved by substantially increasing their private incomes. The lot of the affluent will be improved by an increase in their public goods incomes. All of us will be able once again to walk the streets in safety.

Furthermore McGoverns’ policies will halt and reverse the drift toward two nations – a nation of the affluent and a nation of the workers and the poor. Aside from the dangers to liberty inherent in such a split society, it is inconsistent with the American ideal. Economic well being is not truly an end in itself once the most grinding of want is removed. Economic well being is meaningful as a handmaiden to a social vision. McGoverns’ economic policies are such a handmaiden; they are designed to help achieve “one nation, … with liberty and justice for all.”

Source: The Papers of Abba P. Lerner, Manuscript Division, Library of Congress. Box 15, Folder 4 “Minsky, Hyman P.”
A .pdf copy of Minsky’s manuscript is available at the Hyman P. Minsky Digital Archive.

Image Source: Hyman P. Minsky portrait posted in the “Hyman Minsky at 100” post at the Lars P. Syll blog.

Categories
Accounting Exam Questions Harvard

Harvard. Principles of Accounting. Description, Enrollment, Final Exams. W. M. Cole, 1912-1913

16th century tapestry, a representation of the liberal art of "numbers, which explains the proportions of things."

A highly popular vocational course offering for Harvard undergraduates was William M. Cole’s principles of accounting. This post provides us with the course description, enrollment figures, and semester exams for the 1912-13 academic year.

________________________

Principles of Accounting
pre-1912/13

Links to earlier course material for Principles of Accounting from Harvard, 1900-01 through 1911-12.

________________________

William M. Cole
His Textbook

Accounts. Their Construction and Interpretation for Business Men and Students of Affairs. Boston: Houghton Mifflin Company, 1908.

_______________________

Economics 9
Course Description
1912-13

[Economics] 9 (formerly 18). Principles of Accounting. Mon., Wed., Fri., at 11. Asst. Professor Cole, assisted by Messrs. —— and ——.

This course is designed to show the processes by which the earnings and values of business properties are computed. It is not intended primarily to afford practice in book-keeping; but since intelligent construction and interpretation of accounts is impossible without a knowledge of certain main types of book-keeping, practice sufficient to give the student familiarity with elementary technique will form an important part of the work of the course. The chief work, however, will be a study of the principles that underlie the determination of profit, cost, and valuation. These will be considered as they appear in several types of business enterprise. Published accounts of corporations will be examined, and practice in interpretation will be afforded. The instruction will be chiefly by assigned readings, discussions, and written work.

Course 9 is not open to students before their last year of undergraduate work. For men completing their work at the end of the first half-year, it will be counted as a half-course. It is regularly open only to Seniors and to Graduates who have passed in Economics 1. Students intending to enter the Graduate School of Business Administration are expected to take this course in preparation for the advanced courses in accounting.

Source: Harvard University. Division of History, Government, and Economics, Courses of Instruction, 1912-13, p. 63.

_______________________

Economics 9
Course Enrollment
1912-13

Economics 9. Principles of Accounting. Asst. Professor Cole, assisted by Mr. Eliot Jones.

Total 276: 7 Graduates, 8 Graduates of Applied Sciences, 62 Graduates of Business School, 147 Seniors, 50 Juniors, 2 Sophomores.

_______________________

ECONOMICS 9
Mid-year Examination
1912-13

  1. Indicate, in the form of journal entries, what should be debited and what credited, on your books, for the following:—
    1. You sell goods ($500 net selling price), and receive in exact payment a note bearing interest, at 6%, dated two months ago.
    2. You buy stationery (price $100), and give in return a draft which has been sent to you and has been already accepted by those upon whom it was drawn.
    3. You sell goods to Dombey & Son for $1,000, terms 6% — 10 ds., 5% — 30 ds., net — 60 ds., and to Stalky & Co. for $2,000, on the same terms.
    4. You discount at a bank a note receivable, face $1,500, for $1,492.50.
    5. Dombey & Son pay their bill, taking the discount at 5%.
    6. Stalky & Co., fail to pay their bill when due, but agree to pay 6% interest for the delayed time, and you send them a new bill with interest for 60 days.
    7. Stalky & Co. go into bankruptcy and pay 50 cents on the dollar. You collect your share.
    8. You receive subscriptions, payable in two instalments of $25,000 each, for capital stock to be issued at par.
    9. You issue $25,000 of capital stock for $30,000 in cash.
      Show the trial balance for these transactions.
  2. Explain the purpose of each of the following, and tell how that purpose is accomplished:—
    1. a special column in a book of original entry.
    2. a controlling account.
    3. a six-column statement.
    4. accomplished.
    5. an amortisation table.
  3. The profit and loss account for a year is as follows:—

PROFIT AND LOSS

Rent

$7,000

 Interest

$50
Wages

40,000

 Commission

1,500
Taxes

500

 Merchandise

78,000
Stationery

300
Advertising

700
Expense

500
Allowance for Bad Debts

1,500
Reserve for Bad Debts

5,000
Dividends

5,000
Permanent Surplus

19,050

How many of these items affect the balance sheet, and how?

  1. The annual wear and tear on a certain piece of property is estimated at $2,000. In 1910, $1,500 was spent for maintenance, in 1911, $2,000, in 1912, $2,500. What are the consequences of these facts on the income sheet and on the balance sheet for each of the three years. (Show actual figures in tabular form.)
  2. Would the following appear on the income sheet or on the balance sheet? Under what name in either case?
    1. Cost of a patent bought.
    2. Rent for storage of new machinery ordered from different firms and delivered at different times, but to be installed together, as soon as all arrives, in a new shop.
    3. Author’s royalty on a copyrighted story printed and distributed in an extended advertising campaign.
    4. Cost of heating during permanent interior decoration of a new store.
  3. How far are the following statements true?
    1. A balance sheet is a statement of resources and liabilities.
    2. An income sheet is a statement of earnings and expenses.
    3. A trial balance is a summary statement of the business.

If any of these statements need amendment, illustrate your amendment by concrete items.

  1. Two clerks in an office, A and B, were asked to find the value of a $10,000 bond, payable in 3 years, bearing interest at 5%, on a market basis of 4.67%. A obtained a figure of $10,090.42; B, of $10,089.86. They both used interest tables showing the following present worths and the following amounts.

Present worth of $1.00

Payable in

4.67%

5%

1 year

.955384

.952381

2 years

.912758

.907029

3 years

.872026

.863838

Amount of $1.00

In

 4.67%

5%

1 year

1.046700

1.050000

2 years

1.095580

1.102500

3 years

1.140828

1.157625
    1. Was either right? If so, which? Show your figuring.
    2. Show the amortisation table.

Source: Harvard University. Mid-year examinations, 1852-1943. Box 9, bound volume Examination Papers, Mid-Years 1912-13.

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ECONOMICS 9
Year-end Examination
1912-13

Save one hour for the last question. It will count as one-third of the paper.

  1. Show by journal entries what should be debited and what credited for the following transactions:
    1. Granting a discount to a customer, for early payment of a bill, so that, though the amount of the bill was $100, he pays but $95.
    2. Paying a lawyer $50 for trying to collect a bill that proves uncollectible, and writing off the debt ($250) as bad.
    3. Collecting $75 as full payment, including interest to the amount of $17, for a debt previously written off as bad.
    4. Giving a friend whose credit at banks is not very good, because he is a new-comer in town, and for whom, therefore, you do not wish to endorse notes, your own note for $1000, with the understanding that he will discount it at a bank, and taking in exchange your friend’s note (for the same amount and time) which you intend to keep until maturity.
    5. Discounting at a bank your friend’s note mentioned in (d), because you find his credit has improved in the public mind and you need the money. [Discount $7.]
    6. Returning to the manufacturers, as unsatisfactory, goods billed at $500 and bought to be sold at $650.
    7. Delivering goods from the store as part payment of clerks’ wages, and allowing 5% discount to clerks. [Retail price $50, clerks’ price $47.50.]
    8. Issuing a stock dividend of $50,000.
    9. Selling a new $2,000,000 issue of stock for $2,100,000. [Corporation’s books.]
  2. A bond table gives the value of $10,000 of bonds for January 1 as $10,366.27, and for July 1 as $10,323.60. On the latter day you collect $250 interest. What entry shall you make for the interest?
    Assuming that the valuation of the bonds was determined on a 4% basis, how could you prove the correctness of the July 1 valuation if you knew that the valuation for January 1 was correct?
  3. Define and discuss the purpose of the following: —
    1. a machine rate,
    2. a life-insurance reserve,
    3. a national-bank redemption fund,
    4. a stores ledger,
    5. a machine ledger,
    6. a controlling account.
  4. Would expense burden enter into a plan of cost accounting for (a) a department store, (b) a hospital, (c) a college, (d) a gas company? Explain briefly how, or why not, in each case.

Remember in solving problems that time and confusion are often saved by the use of journal entries as guides in determining which accounts are affected.

  1. The balance sheet a year ago was as follows: —
Plant $125,000 Capital Stock $140,000
Accounts Receivable 33,000 Bills Payable 10,000
Merchandise 19,000 Accounts Payable 24,000
Cash 5,000 Surplus 8,000
$182,000 $182,000

An abbreviated tentative income sheet for the year just closing gave the following figures: —

Wages $85,000 Other Expenses $71,000
Materials 54,000 Gross Income 240,000

No items relating to the care of property were included in the “other expenses,” and they are now to be provided for. Such items are found on the debit side of the trial balance as follows:—

Depreciation $5,000 Replacement $4,000
Repairs 8,000 Additions 12,000

Supposing the only changes in the balance sheet are those caused by the items shown above (profit or loss and care of property) and that cash absorbs the net effect of changes not otherwise indicated, show the income sheet and the balance sheet for the new year.

  1. Prepare such a tabular statement or statements as an accountant should give to his employers or clients for a business yielding the following figures on three trial balances (of ledger balances) taken at the times indicated.
Trial balance at the opening of business, Jan. 1, 1912 Trial balance, Dec. 31, 1912, before the books are closed Trial balance at the opening of business, Jan. 1, 1913
Dr. Cr. Dr. Cr. Dr. Cr.
Capital Stock $200,000 $200,000 $200,000
Bills Payable 30,000 40,000 40,000
Accounts Payable 35,000 37,500 37,500
Surplus 7,000 7,000 9,000
Dividends declared 10,000 10,000
Real Estate and Plant $135,000 $137,500 $137,000
Accounts Receivable 88,200 80,200 80,200
Goods in process 17,000 17,000 20,000
Finished Goods 25,000 25,000 23,000
Raw Materials Inventory 15,000 15,000 35,000
Raw Materials 57,000
Wages 7,000 52,000 2,000
Taxes 200 2,300 200
Insurance 1,000 2,200 1,000
General Expenses 7,500
Sales 113,200
Cash 8,000 2,000 2,000
$289,200 $289,200 $397,700 $397,700 $298,700 $298,700

If you give more than one statement, prepare one at a time, and leave the reconciliation between statements until all are complete.

Categories
Harvard

Harvard. Report of Economics Department Visiting Committee. 1961

The Harvard economics department’s rocky relationship with its visiting committee chairman in 1950 has been documented in earlier posts. The friction continued for at least a decade as can be seen from the not-so-gentle reminder from 1961. The business folks on the visiting committee still thought they had an obligation to lobby for more business-friendly instruction from “their” economics department. It is pretty clear that the economics department had a pair of deaf ears with respect to this ideological nagging. For those who can hear (and read), does this seem familiar?

_________________________

REPORT OF THE COMMITTEE
TO VISIT THE DEPARTMENT OF ECONOMICS

To the Board of Overseers of Harvard College:

It should be stated at the beginning that this report expresses the views of the Chairman of the Committee and does not reflect the unanimous opinion of every member of the Committee. The Committee meetings have not been well attended, and there have been divergent and often opposite views stated by those committee members who have been at the meetings.

The situation in the Economics Department has been the subject of controversy in the more distant past, but during the last decade the two more important points of criticism mentioned in the written reports of the Committee Chairmen were (a) the lack of balance in the viewpoints of the members of the Department, and (b) the need for senior members of the Department giving more attention to teaching the undergraduates. These reports were written by Clarence B. Randall, Chairman, in November 1950, and by Frederick C. Crawford, Chairman, in June 1956.

With regard to the lack of balance in the Department, it would seem appropriate to quote from these reports. The last paragraph of Mr. Randall’s 1950 report states: —

This problem of balance within the Department will not be solved by the ad hoc committees. There only the qualifications of the particular man are under consideration. It is not the function of such a committee to determine whether the man’s appointment will restore balance or add to the lack of balance. That delicate question can be solved only through leadership by the President, the Provost, and the Chairman. We have confidence that they share our concern and we hope that this statement of our apprehensions will be helpful to them.

The President (Mr. Conant) did study this matter and discussed it with the Chairman of the Department (Mr. Smithies). The latter agreed that the Department’s balance “could be improved if we had at least one member whose major interest was what we might call the economics of enterprise. We believe that this is a field of growing importance but it is one that has not been widely cultivated in economics departments. An additional member of the Department who could give an undergraduate course in the Economics of Enterprise and a graduate seminar on the same lines would contribute to a better balance of the Department.” To do this the President recommended to the Governing Boards (who approved) in January 1952 that a full Professor of Economics be named holding an appointment on three faculties — the Faculty of Arts and Sciences, the School of Business Administration, and the School of Public Administration. The directive to the nominating committee was as follows: —

to submit one or more names of men of character, high scholarly distinction and first-rate teaching ability who have an understanding of business as it is actually operated. To that end, the man in question should have had contact as a scholarly investigator or consultant with the operations of industry and commerce; he should have an awareness of the positive role of business enterprise in a changing and developing economy. His teaching would be directed towards presenting to Harvard College students a realistic view of business management and its relation to the total economy.

Mr. Crawford’s 1956 report had this to say on the subject: —

Although considerable effort was expended in seeking a man qualified for this interesting post, the matter was later dropped. The present Committee believes that the best interest of the Department would be well served by the addition of a professor of “The Economics of Enterprise,” and strongly recommends that the proposal made in 1950 by the Department and the President be carried out.

*      *      *

Dynamic Economics: Important as were the reasons given in 1950 for the appointment of a professor of “The Economics of Enterprise” there are today other reasons of even greater importance:

    1. The United States is in a period of great economic expansion.
    2. Ever expanding frontiers of science offer endless opportunity.
    3. Increasing productivity brings constant economic change.
    4. An evolution is taking place in business management’s sense of responsibility.

*      *      *

A professor of “The Economics of Enterprise”: The Committee strongly recommends the appointment of a professor of “The Economics of Enterprise” for the positive reasons stated above.

This subject has been discussed several times with the Chairman of the Department and at Committee meetings, and has been mentioned in verbal reports of the Chairman of the Visiting Committee. In the opinion of the Visiting Committee Chairman it is important, because the economy of this country is based on business (speaking broadly) which has developed this nation into the most powerful in the world economically and with the highest over-all standard of living for individual citizens. This has been the result of business operating under the capitalistic, competitive, private enterprise, profit and loss system which has provided the incentives for individuals to take risks in the hope of rewards. It would seem proper and important that the role and contribution of business, of private capitalism and free enterprise, and of profits in our economy be set forth clearly, forcefully, and interestingly to students in economics at Harvard. This would be a balance to the views of those who favor an expansion of the so-called public sector of the economy and a continuation of the trends of recent decades towards more Federal Government intervention into the lives of individuals and into business activities.

The Chairman and several members of the Visiting Committee believe that a real effort should be made to find and appoint a Professor of Economics of Enterprise. It is only fair to say, however, that other Committee members feel that such a professor would tend to defeat his own purposes as he would be considered a propagandist; also, as the role of business enterprise in the economy is integral to any understanding of economics, the self-evident characteristics of its importance can be brought out more forcefully in a broad handling of the subject of economics rather than through the channels of special instruction.

Whatever the approach, there seems to be a real need to provide ways of more fully informing the Harvard undergraduate about the role of business in the economy. One way would be through adequate instruction in the Economics Department by a Professor of the Economics of Enterprise. Other suggestions have been made — (a) to have a course of lectures on various aspects of business given by several outstanding business men who have been teachers of or trained in economics, or to have such men give some lectures in Economics I, (b) to invite as visiting lecturers for a year from other universities professors of economics who have the viewpoint of a Professor of the Economics of Enterprises to give such a course or courses, (c) to utilize more fully professors from the Harvard Business School, and (d) to institute a program of talks by business men in the Houses.

The Visiting Committee Chairman believes that the Administration and the incoming Chairman of the Economics Department should give serious thought to this problem to find an early and suitable solution in which members of the Visiting Committee would endeavor to be helpful.

The need for improving the teaching of undergraduates by the Economics Department was mentioned in the 1950 and 1956 written reports of the Visiting Committee. Recognizing that the continuing decline in the number of Economics concentrators strongly suggested the need for reconsideration of the undergraduate program, an Economics Department Committee on Undergraduate Instruction made up of key senior and junior members carefully studied this matter. Pursuant to this study the Economics Department in 1960 adopted a revision of its courses and its teaching to improve undergraduate instruction, taking effect in the academic year 1960–61. The revisions were designed to orient undergraduate study around the student who does not plan a career in Economics, and to clearly differentiate undergraduate study from the graduate program. It is an endeavor to attract more undergraduates into the field of economics and to introduce more flexibility into the curriculum by using many more half courses and entering some new areas. It does not alter total course requirements for concentrators and it increases the amount of time which the senior staff devotes to undergraduate instruction. It would seem to the Visiting Committee Chairman that this revision is sound and intelligent in its principles. The hope is expressed that the Economics Department Committee on Undergraduate Instruction will continue to appraise this program in the light of actual practice and be prepared for further revisions based on experience.

DWIGHT P. ROBINSON, JR.
Chairman

June 15, 1961

Source:  Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers. Box 17, Folder “Economics Department 1960-62”.

Image Source: June 1, 1959 Time Magazine cover of Dwight P. Robinson, Jr.