Author: Irwin Collier

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Harvard Undergraduate

Harvard. Survey of High Honors Students in Economics, 1925-1955. Harris, 1956

The following memo summarizes the results of a survey of “high magna” or summa A.B. economics concentrators who graduated from Harvard between 1925 and 1954. The 211 respondents accounted for 84% of the alumni/ae contacted. The chairman of the department of economics who initiated the survey, Seymour E. Harris, was interested in the career paths chosen by the top undergraduates of the economics program and obtaining feedback from them about what they thought was good and not-so-good about the content and ways they were taught at Harvard.

About the same time a similar report was written about the experiences and opinions of 193 economics PhD graduates from 1950-54.

___________________________

Harvard High Honors Students

Seymour E. Harris, ’20
Chairman of the Economics Department

As Chairman of the Economics Department, I sent out a questionnaire to 252 Harvard College graduates who had received a high magna or summa in economics in the last 30 years. This group accounted for 6 per cent of the seniors in economics in these years. The objective primarily was to find out what had happened to these men (and women) after they received their A.B.’s and, with the intent of throwing light on our current educational practices, to obtain and analyze their views concerning their Harvard education. This is the only study of high honors students at college that has come to my attention.

Replies

Since we received 211 replies, or 84 per cent, the response was most satisfactory. Exclusive of those who could not be located (one was deceased), the responses were 87 per cent of the total sent out.

As might be expected, the number of questionnaires returned varies inversely with age: with classes before 1929, 18 out of 31 responses were received, or 58 per cent; in the last 6 classes, 57 out of 63 replied, or 90 per cent. The differences are relevant in that since the older classes responded in smaller numbers, it may be assumed that incomes are biased downwards, that is, average income is higher than is revealed in the results to be given later.

Occupations of High Honors Graduates

Professions 114
     Lawyers 43
     Teachers 31
     Government Employees 20
     Research Economists 12
     Physicians 4
     Writers & Editors 4
Executive, Managerial, etc. 56
     Executives 27
     Employed in Finance 17
     Employed in Nonfinance 12
Military Service 13
Students 18
Housewives 4
Other 6
211

[p. 2]

The professions, it will be noted, accounted for 54 per cent of these graduates of the last 30 years. For 1947, according to another study based on a sample of 9,000 graduates in the nation, 50 per cent of the male graduates (the females in our sample are a relatively small percentage of the total) were in the professions. When allowance is made for those in our sample still students (excluded in the national sample) and the younger average years out of college of our respondents (a weighted average gives but 13 years out of college), then the number in the professions of these high honors graduates is substantially larger than in the national sample of male college graduates. The attractiveness of the professions for our sample is much greater than is suggested by our figures; for the forties and fifties, years in which our sample is relatively heavily concentrated, were also years when the pull of business was especially great. Thus, as I showed in my Market for College Graduates (p. 89), the proportion of all male graduates in business rose from 37 to 49 per cent from 1940 to 1947-48 and of the professions declined from 63 to 44 per cent.

Graduate Degrees

Of these 211, 151 earned at least 1 graduate degree; 43, 2 or more; and 5 earned 3 graduate degrees. More than 70 per cent obtained graduate degrees. As might be expected, this percentage is much higher than for students generally. For example, in a corresponding period only about one quarter of all recipients of undergraduate degrees obtained a graduate degree.[1]

[1]This figure is obtained by comparing all undergraduate and graduate degrees for the average year in which the graduates in our 211 sample took a graduate degree. Basic figures will be found in HEW, Statistics of Higher Education, 1951-52, p. 37, and the Commission on Financing Higher Education, Financing Higher Education in the United States, 1953 (Millett Volume), p. 32. The weighted average of our sample should receive a Ph.D. in the middle forties.

The largest number of degrees of the Harvard sample were in law (38 per cent); next the M.A. (35 per cent) and the Ph.D. (30 per cent). When one compares these percentages with the national figures, one can see that the able undergraduate disproportion-

[p. 3]

ately seeks higher degrees in Arts and Sciences and especially the Ph.D. The Harvard sample reveals 6-8 times as many Ph.D.’s proportionately to all graduate degrees as the national sample.

Percentage of M.A. to all graduate degrees, national (1939-40)—25 (1949-50)—17
Ibid. Harvard sample (For 30 year period) (35)
Percentage of all Ph.D.’s to all graduate degrees, national (1939-40)—5 (1949-50)—4
Ibid. Harvard sample (For 30 year period) (30)

Source: Ibid., and my calculations.

These high honors Harvard graduates especially seek graduate degrees in the Harvard Graduate Schools (80 per cent at Harvard; 5 per cent, Columbia; and 3 per cent, Chicago). Percentage of graduate degrees at Harvard of the total were as follows:

All 76 per cent
LL.B 77 per cent
M.A. 74 per cent
Ph.D. 74 per cent
M.B.A. 91 per cent
M.D. 100 per cent
Other 40 per cent

Degrees and University Awarding Them

Degree Total Harvard Columbia Chicago Yale Oxford Minnesota Other
LL.B 58 45 4 1 2 0 1 5
M.A. 54 40 4 1 0 0 1 8
Ph.D. 46 34 2 3 0 1 1 5
M.B.A. 22 20 0 1 0 0 0 1
M.P.A. 6 6 0 0 0 0 0 0
M.D. 4 4 0 0 0 0 0 0
Other 10 4 0 0 1 2 0 3
TOTAL 200 153 10 6 3 3 3 22

Of the 200 degrees, 98 were in economics (inclusive of 4 joint degrees), suggesting that high honors concentrators tend to remain in their undergraduate field of concentration (49 M.A.’s, 38 Ph.D.’s, 5 M.P.A.’s). In addition there were 22 business degrees. In view of the large relative number of M.A.’s and Ph.D.’s

[p. 4]

given by Harvard to our high honors group, it is clear that these distinction men provide much of the raw material for our Graduate School of Arts and Sciences. The only other large outlet was law (59).

Income Distribution

Incomes of the high honors graduates of the last 30 years are high. The median (the value midway from low to high) with students, housewives, and soldiers eliminated is $11,227, and the arithmetic mean (in total divided by the number of income recipients), $14,664. This is a surprisingly high figure, especially in view of the fact that these men are out of college (weighted mean) only 13 years; that the proportion in the professions, with relatively low incomes compared to business, is large; and that their education has in a large proportion of instances been delayed by the war. The median of $11,227 may be compared with the following:

Median income of males, 14 years and over, 1954 $2,300
Median income of males in professions, 1954 $4,905
Median income of males, managers, officials and proprietors, except farmers, 1954 $5,234
Median income of population, 1947 $2,200
Median income of male college graduates, 1947 $4,689
Median income of HYP graduates, 1947 $7,365
Median income of HYP graduates, adjusted for rise of income since 1947 $10,000

Source: They Went to College, pp. 26, 179; U.S. Census Income of Persons in the U.S., 1954.

Income Distribution

 

Annual Income Frequency Frequency, excluding students, housewives, and soldiers
$0 16 0
1-5,000 27 15
5,001-10,000 66 62
10,001-15,000 44 44
15,001-20,000 14 14
20,001-30,000 24 24
30,001-40,000 4 4
40,001-50,000 3 3
50,001-75,000 4 4
75,001-100,000 0 0
100,001 and over 1 1
TOTAL 203 171
Not given 8
Mean (all reporting) $12,648 Mean (excluding those named above) $14,664
Median (all reporting) $9,470 Median (same as above) $11,227

[p. 5]

When allowance is made for the low age of our group as against the national sample (and the disproportionate failures to reply of the older graduates in our sample), then the relatively high income of our group stands out. In the sample of 9,000 college graduates, the median income for male college graduates aged 35 years was $4,618; for those aged 40-49, $6,152; and for those aged 50 and over, $6,244. The 1950 Census shows that whereas the 30-34 year group with 4 or more years of college had 5.1 per cent in the $10,000 or over group, the averages for those aged 35-44, 45-54, and 55-64 were 13.3, 19.2, and 18.1 per cent, respectively.[2] (The 30-34 year group comes nearest to representing our sample.) Since our graduates correspond only to age 34 (and even lower when allowance is made for the disproportionate loss of time in graduate work and military service[3]), the median figure of our group should be raised by a substantial percentage to make the figure comparable with the national sample.

[2]Calculated from U.S. Population Census: Education, Special Report PE No.5B, pp. 108-9.

[3]Disproportionate because our sample is a young sample, especially subject to military service, and years spent in the service and graduate work are a disproportionate part of working life.

An honors record at college seems to pay. The above statistics underline this conclusion. In They Went to College, the following is said of a 9,000 national sample (median income):

Greasy Grinds $5,149
All Around Students $4,775
Big Men on Campus $4,648
Those who Just Sat There $4,300

(Ibid., p. 164)

Students with high grades earn larger incomes according to this national male sample. In business 20 per cent more A than B and C students had incomes of $7,500 or over. Among doctors, lawyers, dentists and scientists, the corresponding advantage for A students was 35 per cent; among teachers, clergymen and artists, 175 per cent; and among public servants, 167 per cent. (Ibid., p. 160.)

[p. 6]

The larger number in the professions pulls down the average income of our group. Thus for the 114 in the professions, the mean income is $11,567 and the median, $9,663; for the 57 others (business executives and the like), the respective figures are $21,557 and $17,142, or about twice as high as in the professions. Also relevant is the fact that the percentage of those in executive and business jobs tends to rise with age. Hence our sample with an average adjusted age of 30-35 yields a lower income because the older age groups include larger percentages in this group. In ages 25-29, 30-34, 35-44, 45-54, and 55-64, the percentages of males in the executive-business group were 6½, 10, 12, 15, and 14 per cent, respectively.[4]

[4]U.S. Census, op. cit., pp. 88-89.

Attitudes Towards Harvard Education

Of 211 respondents, 144 or 68 per cent wrote that they would concentrate in economics again if they were starting all over. But 58 of the 211 or 28 per cent believed that they concentrated too much.

In reply to the question, would they go to Harvard in 1956 were they at the appropriate age, the replies were most satisfying. Of 211, 196 (14 with qualifications), or 93 per cent, would do it all over again and 3 per cent were undecided. But 6 (3 per cent) would not; and 2 inclined towards seeking an education elsewhere.

In reply to a question, what do you consider yielded the largest returns from your years at college, the responses were as follows. Note that the average respondent included 2-3 factors. Course work received the largest number of votes and tutorial next.

Largest Contribution to Education

Item No. of times mentioned Item No. of times mentioned
Course work 120 Extra-curricular activities 39
Tutorial 95 Thesis 32
Informal association with other students 50 General academic atmosphere and intellectual freedom 29
Reading on one’s own 45 Intellectual awakening 20
Contacts with faculty members 40 No answer or undecided 10
480

[p. 7]

In their replies much emphasis was put on the advantages of the smaller and more personalized courses; on the new general education program; the quality of the faculty and the importance of personal contacts with the faculty.

For tutorial, 92 expressed favorable views; 13 favorable with qualifications; 15 favorable in relation to thesis; and 18 unfavorable. Hence the vast majority believed that tutorial made an important contribution. In view of the fact that tutorial presumably counted over the years for about 1/7[5] of the total education, its large returns are evident (120 votes for courses and 95 for tutorial). Tutorial was especially important in the first 20 years of this survey. In the last 10 years, the need of economy weakened tutorial. Among the graduates of the first 20 years (1925-44) 88 commented on tutorial, all favorably (3 with qualifications); in the years 1944-54, 49 commented. The percentage of favorable comment for these years was 55 per cent; favorable with qualifications, 20 per cent; unfavorable, 24 per cent. The responses clearly reflected a deterioration of tutorial in the last 10 years.

[5]3 courses out of 16-17 classroom courses plus 3 equivalent to tutorial.

“Suggest any ways in which your education might have been improved.” The analysis of replies follows. A more balanced program, more and better mathematics and statistics, more and better tutorial, smaller classes, and more personal contact with faculty stand out.

[p. 8]

Improvement of Education

Item No. of times mentioned Item No. of times mentioned
More balanced program 43 Better training in writing through more papers 17
More and better courses in mathematics and statistics (particularly Math.), possibly required for honors candidates 29 Emphasis on analysis of problems and on original thought 8
More and better tutorial, perhaps even extending into other fields than Economics 23 Better personal guidance for freshmen and others 8
Smaller classes and more discussions in them 24 A better and earlier theory course 5
Greater personal contact with faculty members 22 Less pressure; less emphasis on grades 5
More “practical” courses 19 Teachers who possess teaching rather than research ability 5
Other 26
No suggestions, or inapplicable to others than respondent 46
280

These replies should be considered in the light of the fact that the respondents cover a 30-year period which witnessed the rise and some decline in tutorial, the opening of the Houses, and the introduction of General Education. The criticisms and proposals apply to the education of these men (and women) at the time they were in college. The weighted mean (as suggested earlier) is 13 years out of college.

Replies to an invitation to make general comments cannot easily be classified. A large number of those commenting want more “practical” courses which would give the undergraduate concentrator a more intimate acquaintance with current economic events and issues and with the problems and actual practices of the business community. In general, while praising the courses offered at Harvard, this large group seems to feel that the average economics concentrator should be prepared more adequately than at present for business school and/or a business or legal career.

[p. 9]

But a much smaller group insists that an economics major ought not to provide such preparation, that students should not major in economics because they plan to go into business, and that the Department should continue to emphasize economic theory and history.

A second major point that was made was that study at Harvard and concentration in Economics are most important insofar as they develop a mode of thinking, a clearness of mind, and a power of analysis in the individual. Somewhat in line with this, several respondents again emphasized the need they felt for a faculty with high teaching ability rather than intellectual eminence alone. The more interested the faculty is in teaching, and the more concerned its members are with their students, both formally and informally in contacts in and out of class, the more rewarding will a Harvard education in Economics be.

Finally, several respondents reiterated the need for a balanced program and praised the General Education program, while another group worried that concentration and distribution requirements might seriously limit the freedom of choice of the undergraduate as to studies. The intelligent enthusiast, this group felt, should be allowed to “overconcentrate” if he so desires, while the normal student should be allowed to gather a more liberal education. However, there were several other respondents who stressed strongly the need for abler and more personal guidance in the choice of courses both in and out of the department.

Harvard Education and Income

Finally, our high honors concentrators were asked to explain the fact that a college graduate seems to earn a lifetime income of $100,000 in excess of the non-college graduate and the Harvard graduate receives $200,000-$300,000 more than the non-college graduate. Our objective in including this question was not so much to get an adequate explanation of these differentials but to classify the explanations of an unusually able group of college graduates.

[p. 10]

Differences in Income

Variations in ability 121
Connections 93
Better education 84
Higher income background of Harvard men 37
Harvard’s prestige and name 31
No reply or don’t know 40
406

Many stressed the point that Harvard’s high quality education attracts able students, and these in turn attract better teachers who provide a better education. The high quality of undergraduate instruction stimulates many to enter graduate schools, it was held by many. Though connections were emphasized as factors in attaining employment, education and ability, it was emphasized, were the factors that enabled men to hold their jobs.

Some Quotes

Comments by High Honors Men on Harvard Education:

Two high government officials, out of college about 25 and 15 years, respectively, write:

“Briefly stated, I suppose the greatest returns were intangible in form, involving no particular factual knowledge nor any specific know-how. It was the development of a feeling of confidence and dignity — the lifting of horizons yielding perspective together with some degree of understanding. From formal course work I gained background and acquaintanceship with basic material; tutorial work developed thinking in terms of relationships; and reading on my own stimulated reflection and yielded appreciation. Extra-curricular activity such as varsity athletics, particularly intramural participation, was helpful in maintaining a feeling of physical well-being.”

“On the whole, I would guess that particular courses taken by students and the particular educational techniques used are much less important than the intellectual stimulation and the perspectives provided by the individual faculty members. While I took a large number of economics courses as an undergraduate, I don’t regret this overemphasis because they were on the whole stimulating courses given by very good men. At the same time I feel heavily indebted and remember very fondly an English literature course, given by the late Ted Spencer, and I would be hard put to judge the relative value of that course for my later professional work relative to any of the economics courses.”

[p. 11]

By a bank official, out less than 10 years, the following appraisal is made.

“Association with students in many other fields in the House system (Leverett House in my case) was in my opinion worth more than several courses. We had an informal Seminar in Practically Everything each evening in which everyone contributed something from his particular field of interest.

“The reading period before exams was valuable for pulling a course together and relating it to others. I found that I missed it very much at Chicago where the quarter system did not provide time for relief from being lectured at.”

A member of the faculty of the Harvard School of Medicine, out of college more than 15 years, says:

“I’m not sure when my education really took hold but somewhere between 1936 and 1940 I developed certain habits of thinking, reading, wondering which have served me in good stead. I can’t say whether it was course work, tutorial, exposure to a fine faculty, exposure to some very able classmates. I don’t doubt its value, however, and I’d certainly do it again.”

An outstanding economist, out about 10 years, now on the staff of one of the major universities, has something to say for the lecture system and overconcentration and higher standards.

“If anything, I would argue that I didn’t concentrate enough on economics. I began with a broad interest in other social sciences, and while I don’t for a minute think of those courses as wasted, I think the scales should be tipped in favor of more rather than less concentration.

“It’s a firm belief of mine that in most ways there’s nothing like a good lecture course. I learned a lot in tutorial, but looking back it’s clear to me that there wasn’t enough of it. A little bit of tutorial makes only a little bit of sense. For tutorial to be really valuable to the good student it would have to take more of his (and of the tutor’s) time, say at least the equivalent of one course, and probably more. And there should be more writing.

“I should have been required to study mathematics along with elementary economics, instead of having to discover it myself, much later. The absence of a decent course in statistics in the department also cost me time later on. I have the strong feeling that undergraduate courses in economics are much too easy for honors candidates. Much of what is taught at the graduate level could be pushed down to the junior year. For the serious undergraduates anyway. This would free graduate courses for really advanced work; much too often every graduate course feels obliged to begin at the beginning. Sometimes I have the distinct feeling of never having learned anything in a specifically undergraduate course.

“As I compare the present undergraduate curriculum at Harvard with that of my own day, I am filled with nostalgia for the almost free elective system under which I was a student. As I recall, we had to have one course each in Natural Science, Social Science, and Humanities, and after that it was all gravy. No doubt General Education has some

[p. 12]

advantages for many students. But it would be a shame if the occasional enthusiast who wants to study nothing but economics (or mathematics, or physics, or Slavic Languages and Literature) should be prevented from so doing.”

A business executive, out 7 years, urges tying theory to the problems of the day, earlier concentration in economics, and more careful choice of tutors.

“The Department fails to show its students sufficiently that economics is primarily a disciplined way of looking at our environment and analysing it, rather than merely a set of facts and theories. Only a small minority of students — even Harvard students — have strong theoretic abilities and interests. This does not mean that Harvard should not strive to give its students rigorous theoretic training. But it does mean that the theory must be tied to practical applications in an obvious, meaningful and continuous manner.

“My second observation is that too many students concentrate in economics for the wrong reasons or by mistake. It would be a tremendous help if all students who had any thought of concentrating in economics were strongly encouraged to take Economics 1 in their freshman year. This would give them a basis for deciding whether they wanted to go on with the subject a full year before they have to make their final decision as to a field of concentration. I have heard it argued that Ec.1 is too advanced a course for freshmen. If that is true, then the course is badly designed. But I doubt that it is true; if the freshman can take Physics 1 or Math 1, he can certainly cope with the theory of marginal adjustments and basic national income theory.

“I feel strongly that the Department was lax in providing guidance to its Ec. 1 instructors and tutors last year. Tutorial tends to become a reflection of the varied interests of the individual tutors and not an expression of a thought-out educational scheme. Tutorial therefore tends to be successful for the bright student accidentally matched with the proper tutor. It is much less successful — and less successful than it could be — for the average student.”

In the view of a top economist, out about 25 years, connections are important. He also opposes excessive concentration.

“My guess is that the Harvard pass student turns into a better earner than the honors student — suggesting that connections are a big part of the explanation. I reckon that as taxes press more heavily on income and inheritance there’s an increasing tendency to transmute capital into the kind of power that can hand over income to relatives and favorites in guise of their ‘earnings’.

“Harvard training does seem to be among the best in making sure that a young man can take hold effectively in graduate school. (The glamor of Swarthmore, Reed, etc. rests partly on their really having only honors students; if we omitted from the Harvard number those who never aspired to honors, the percentage making scientists, etc. would jump.)

“A student who thinks he has chosen his field might ideally minimize more duplication and improve basic training by devoting almost all his undergraduate time to other fields. But he needs to find out enough about the field to validate his choice; and he is entitled to the sense of (relative) mastery he gets by exercising his talents. I think a…recommendation of a minimum-scale economics major for intending graduate students is optimal, balancing these questions. Also has merit in terms of working conditions for teachers at undergraduate centers.”

[p. 13]

A successful Southern business executive, out about 15 years, looks back to his education at Harvard with much satisfaction. Concentration in his view mirrors the interests of the contemporary society.

“I do not regret the extra work. I think the years at Harvard were useful, fruitful, and I know, pleasant. I am egotistical enough to believe the result was good. I believe it was economically valuable, and I know it contributed much to making life more endurable, or more happy, depending on my state of mind.

“A great deal of the value, I am certain, was derived from living in a climate of high average intelligence. A man could not be as ordinary as his inclination might lead him to be. There was too much behind him, in the traditions of the university, before him in the faculty, and on all sides of him in his classmates. I am sure this climate of intelligence forced many of us to greater achievements than we would have made ordinarily.

“I believe, however, that the direction of education in any responsible university tends to mirror the concerns of the society from which the undergraduates come. Why then, in the late 30’s and early 40’s, should there be any surprise that an undergraduate would over-concentrate in economics or in government? The whole concern of society was directed largely toward the understanding of the economic bases of society, and the mitigation of some of the allegedly inherent evils. I believe that today’s view of economics as simply another useful tool is more accurate, more valuable, and far less dangerous.

“In the same way, the overconcern with science has naturally reacted and caused an equally great concern that the undergraduate is being made into a machine, with brain but without soul. I shall be greatly surprised if overdiversification does not result and if the undergraduate of today does not say twenty years from now in answer to a like questionnaire, that he wishes he had specialized more. However, I doubt that harm will be done in either case so long as Harvard maintains her great climate of intelligence, a truly open mind, and a refusal to be pushed down any alleys of education, politics, or economics, simply because others are going that way.”

A banker-economist wants Harvard staffed by men with outstanding analytical minds.

“In staffing the Economics Department, great emphasis should be given to obtaining men with outstandingly good analytical minds, men who are interested in teaching their students the fundamental principles and the proper use of tools of analysis. The institutional and ‘practical’ knowledge can be acquired later, provided that the student is made to realize that he leaves Harvard with a good foundation but that he must build the superstructure himself as he acquires experience in the use of what he learned in school.”

A view expressed more than once is that economics is not necessarily the best preparation for business.

“I do not believe that economics, at least in 1947-50 and on the undergraduate level, provides any better preparation for business than many other academic disciplines. (But I understand some other schools are managing to combine academic and business courses.) For this reason I think general courses, or a diversification is much better than concentration in economics. It might even be that concentration in economics, government, or the sciences should not be permitted in undergraduate work. Everyone

[p. 14]

has to specialize after college, and college should be the time establishing a broad base of general education.”

A well known government and academic economist, out 25 years:

“If I knew I was going to become a professional economist, I would not concentrate in economics as an undergraduate but would leave the instruction in economics to graduate school.”

A lawyer out about 15 years:

“My training in economics has been of great value to me in the law. We represent a number of business corporations and the approaches I learned to the economic aspects of society have served me in good stead on a number of occasions. When in school I often bemoaned the lack of more ‘practical’ subjects in economics. I was wrong — adhere to the theory and the history.”

More case work is the proposal of a lawyer out 10 years:

“I think that at least in the social sciences there could have been a substantial improvement through an increased use of individual project work resulting in written reports or other papers. The ability to do research, make studies, draw conclusions, and report them lucidly, is one which comes only from practice and experience and the college years could and should make a substantial contribution to that experience.”

More details about the current financial scene are suggested by a Radcliffe Magna and P.B.K., out about 10 years:

“I think my Economics background (specialized in Money and Banking) could have been improved through a little more stress and detail in recent and current fiscal and monetary developments; e.g., level and trend of the government bond market; actual current Treasury financing and its actual effect on the bond market (using bond prices and yields); consumer credit trends; weekly Federal Reserve policy (in open market operations) through financial page in N.Y. Times, for example. In other words, while I received a magna cum laude and Phi Beta Kappa in Economics, when I actually went to work I knew next to nothing about banking figures — level of long-term government bond interest rates, etc. The theory was all there, but actual working knowledge was practically nil.”

An able economist, out 20 years, proposes seminars for honors students and more and better Mathematics and Statistics:

“I think there might be increased opportunity for outstanding honors candidates in economics to learn from each other by meeting as a group. Perhaps this could best be done by providing a special course required of honors candidates (or better, some more highly selected group), perhaps in some other way. It may be that this need is met by the present Economics 101.

“The glaring deficiencies of the undergraduate economics program of my day, considered as pre-professional training for those going on in economics, were that it failed to provide the student with two of the basic tools: mathematics and statistics. (What is far more serious, the same statement applied to the graduate program of that period.) This comment, however, poses a serious problem as to the

[p. 15]

purpose of the undergraduate program. It cannot be assumed that the majority of undergraduate concentrators will, or should, go on in economics. Nor can it be assumed that those who do go on will make the decision much before they graduate. For those who go, say, to law school or into business, the tools referred to, though useful, are not essential. Thus my comment, while applicable to my own education, cannot be taken as a criticism of the undergraduate program in general. The graduate program, however, was seriously deficient.”

Conclusion

It is clear that the high honors graduates in economics have done well in later life. They disproportionately enter the professions and go to Harvard Graduate Schools. Their success can, of course, be associated with the high quality of the men, the circles in which they move, and, we hope, their Harvard education. Clearly most of them believe that Harvard has helped them greatly. The association in graduate courses is helpful; but they emphasize also tutorial and small classes; and they would like to have closer association with faculty. The Houses clearly make a contribution here. But in the writer’s opinion tutorial (tied to the Houses) and smaller classes and perhaps a somewhat greater emphasis on undergraduate vis-a-vis graduate instruction would also help.

Source: Harvard University Archives. Department of Economics, Correspondence and Papers, 1930-1961 and some earlier. Box 16, Folder “Honors-Highest (Harvard)”.

___________________________ 

The Harvard Crimson reports…

Survey Joins Honors Work, High Incomes
Honors Status Pays Off, Harris Asserts

May 21, 1956

An honors record at College seems to pay.

That is one of the conclusions of a survey report now being circulated among selected members of the Faculty and graduate students in economics by Seymour E. Harris ’20, professor of Economics. The report summarizes the answers to a questionnaire filled out by 211 high magna or summa graduates in Harris’ field of economics, and represents an attempt to find out what happens to “our best undergraduates.”

The survey shows that: “Incomes of the high honors graduates of the last 30 years are high. The median with students, housewives, and soldiers eliminated, is $11,227, and the arithmetic mean (income total divided by the number of income recipients), $14,664.”

Harris calls this figure “surprisingly high” considering that the graduates questioned are out of college (weighted mean) only 13 years, and that the proportion in the professions, where incomes are relatively low compared to business, is large.

Professions Lower

“The larger number in the professions pulls down the average income of our group,” Harris continues. “Thus, for the 114 in the professions the mean income is $11,567 and the median, $9,663; for the 57 others (business executives and the like), the respective figures are $21,557 and $17,142, or about twice as high as in the professions.”

Probing graduates’ attitudes toward their college education, Harris found that most felt they received the largest returns from their course work. Among various items contributing to the graduates’ education, course work was mentioned 120 times, and tutorial, in second place, was mentioned 95 times.

“In their replies,” Harris states, “much emphasis was put on the advantages of the smaller and more personalized courses; on the new general education program; the quality of the faculty and the importance of personal contacts with the faculty.”

He felt that responses “clearly reflected a deterioration of tutorial in the last ten years.” He noted that tutorial was considered especially important in the first 20 years of his survey, while in the last ten years “the need of economy weakened tutorial.

Source: The Harvard Crimson, May 21, 1956.

Image Source: Seymour E. Harris in The Harvard Class Album, 1957.

 

Categories
Accounting Exam Questions Harvard

Harvard. Principles of Accounting. Description, enrollment, year-end final exam. Cole, 1911-1912

Luca Pacioli

The first semester final exam (a.k.a. mid-year examination) for William M. Cole’s two semester Principles of Accounting has been filed in a loose-leaf collection of mid-year exams for 1911-12. This makes the post complete (for now). I am always on the lookout for homework exercises, lecture notes etc. 

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Principles of Accounting
pre-1911/12

Links to earlier course material for Principles of Accounting from Harvard, 1900-01 through 1910-11.

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William M. Cole
His Textbook

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

“The first issue of this book was brought out at a time when no general, non-technical, non-professional treatise on accounting had been published . The author had then been giving for eight years a course of instruction to seniors in Harvard College on the principles of accounting, and believed that many business men and students of affairs would be interested to see briefly but comprehensively how accounts are constructed and interpreted.”
Revised and enlarged edition, 1915.

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Meet the Course Teaching Assistants

Robert Mann Johnson

   Robert Mann Johnson of 58 Lynwood Road, Scarsdale, N.Y., a lawyer with the firm of Milbank, Tweed, Hope & Hadley, died of a heart attack yesterday as he enetered his firm’s office building at 15 Broad Street. His age was 60.

Born in North Weymouth, Mass., he was graduated from Boston Latin School in 1905, Harvard College in 1908 and Harvard Law School in 1911. Mr. Johnson practiced in Massachusetts before coming to New York and being admitted to the New York bar in 1921. He was with the firm of Masten & Nichols from 1928 until 1931 when he became associated with the Milbank company.

Surviving are two daughters, Marjorie Elizabeth and Hollis Ann.

Source: The New York Times, July 30, 1948, p. 18.

Clarence Birch Stoner

1873. Born on October 7 near Sulphur Grove, Montgomery county, Ohio

1896. A.B. from Otterbein University (Westerville, Ohio).

Taught school on the Old Troy pike (near Dayton, Ohio).

1898-1900. Superintendent of Schools at Schanck, Ohio.

1900-04. Superintendent of Schools at Ashley, Ohio.

1904-09. Superintendent of Schools at Mt. Gilead, Ohio.

1909-10. Auditor of the Women’s Educational & Industrial Union.

Work as statistician in Harvard’s bureau of business research [year(s) uncertain, within 1909-1912]

1910-11. University Scholarship, Harvard Business School.

1911. M.B.A. from Harvard University. Thesis “Y.M.C.A. Accounts”.

1911-12. Teaching Assistant for Professor Cole.

1912-1915. Assistant Professor at Carnegie Institute of Technology. Developed new course in commercial engineering.

1915. Starting August, appointed general auditor for Hotels Statler Co., Inc. (Buffalo, N.Y.).

Move to New York City, located in the Hotel Pennsylvania, serving as treasurer.

1928. Appointed secretary and treasurer of the Statler Hotels.

Executive of the Hotels Statler Co., Inc. at time of his death from heart disease in Short Hills, NJ on April 9, 1937.

Sources: Pittsburgh Post-Gazette, 24 September 1912; Buffalo Courier, 14 August 1915; Obituary published in The Dayton Daily News, 10 April 1937 and The Item of Millburn and Short Hills, 16 April 1937.

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Course Description
1911-12

[Economics] 18. Principles of Accounting. Mon., Wed., and (at the pleasure of the instructor) Fri., at 11. Asst. Professor Cole and assistants.

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 18 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: Division of History, Government, and Economics: 1911-12 (1st ed.). Official Register of Harvard University, Vol. VIII, No. 23 (June 15, 1911), p. 67.

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Course Enrollment
1911-12

Economics 18. Asst. Professor Cole, assisted by Messrs. [Clarence Birch] Stoner and [R. M.] Johnson. — Principles of Accounting.

Total 261: 60 Graduates, 129 Seniors, 68 Juniors, 4 Others.

Source: Harvard University. Report of the President of Harvard College, 1911-1912, p. 64.

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ECONOMICS 18
Mid-year Examination
1911-12

As far as possible, arrange your answers in tabular form. Follow the order of the questions.

  1. Assume all the books and records of a business to be correct and complete. If you desired full information about the condition of the business and could have access to one book only, what book should you choose? Why?

Show how the record of the following transaction would appear in that book: the business has for some time owed $4500 to David Copperfield, and the credit to him is already on the books, but as it cannot conveniently pay on demand it gives him a note for $4700, payable March 1, in satisfaction of both principal and interest on the debt.

  1. Supposing a controlling account to be required for creditors, show the cash-book page, in the form that you would recommend, to record cash payments for the following: —
Creditor A, $7000 on account. Freight, $42.
Stationery, $45. Lighting, $15.
Express, $2. Wages, $100.
Freight, $28. Creditor C, $1,500.
Wages, $125. Creditor D, $2,200.
Creditor B, $3,000 on account. Freight, $23.
Wages, $75. Creditor E, $3,000.
Your own note, $2,000.
  1. What expense and income accounts should you recommend (if possible, give titles that suggest the items to be carried to each account, or indicate the items in brackets) for a business operating as follows: —

Owning its own store building.
Doing its own heating, lighting, elevator service, from its own power plant.
Buying all its goods in its own town.
Doing its own hauling and delivering.
Paying the clerks regular salaries and bonuses for large sales.
Advertising by electric displays, window displays, newspapers, and circulars.
Conducting rest and recreation rooms for employees.
Allowing interest on undrawn salaries.
Investing its surplus in loans to local enterprises.
Selling goods for cash, for credit, and on the installment plan (in the latter case charging higher prices and sending out collectors).

  1. Below is a trial balance taken before the books were closed, an income sheet, and a balance sheet. Show (a) the ledger as it looked before closing [totals or balances only], (b) the closing items, and (c) the ledger as it looked after closing. [One ledger form will do for all unless you are unable to do (b).]
Proprietor $140,000
Bills Payable $20,000 30,000
Accounts Payable 310,000 328,000
Merchandise 450,000 350,000
Accounts Receivable 375,000 353,000
Fixtures 4,000
Cash 6,700
Wages 20,000
Insurance 400
Taxes 2,000
Rent 5,000
Interest 800 100
General Expense 7,200     
$1,201,100 $1,201,100

 

Mdse. sales 350,000
Mdse. inventory, 1911 $150,000
Mdse. purchases 300,000
Mdse. handled 450,000
Mdse. inventory, 1912 140,000
Mdse. cost of sales 310,000
Gross profit $40,000
Wages $20,000
Insurance 200
Taxes 2,000
Rent 5,000
Interest 600
General Expense 7,200 35,000
Net income $5,000

 

Merchandise $140,000 Proprietor $145,000
Accounts Rec. 22,000 Bills Payable 10,000
Fixtures 4,000 Accounts Pay. 18,000
Cash 6,700
Prepaid insurance 200
Prepaid interest 100      
$173,000 $173,000
  1. For the business whose statements were given in Question 4, the income sheet showed for the subsequent year a net income of $10,000 (the increase resulted from reducing expenses), and the balance sheet was as follows: —
Merchandise $152,000 Proprietor $155,000
Accounts Rec. 21,000 Bills Payable 15,000
Fixtures 4,000 Accounts Pay. 13,000
Cash 5,700
Prepaid insurance 200
Prepaid interest 100     
$183,000 $183,000

Where did the increase in Merchandise come from?

  1. Suppose the business shown in Question 4 had been converted into a corporation immediately after the balance sheet was made out, and stock had been issued for the proprietor’s credit balance. Suppose the good will had been estimated and entered on the books at $15,000, but no stock had been issued for it. If the business done in the next year had been identical with that indicated in Question 5, and no dividends had been declared, what would have been the items of the new balance sheet?
  2. We have three pieces of property, each valued at $10,000, subject to the same rate of natural depreciation, but we use a distinct method of treating depreciation for each. Our entries to express these methods might be expressed briefly as follows: —
Property A. — Maintenance $1,000
                    To Cash $1,000

 

Property B. — Replacement Fund $1,000
                    Depreciation $1,000
                    To Cash $1,000
                    Property B $1,000

 

Property C. — Depreciation $1,000
                    To Property C $1,000

What is our policy of treatment for each property?
How does each policy affect the income sheet?
How do the second and third policies differ from the first in their effect on the balance sheet?

  1. In June, 1912, we take a lease of a building for $10,000 a year for 10 years, to begin on Jan. 1, 1913, and therefore expiring Jan. 1, 1923. We buy of the present occupant of the premises his last half-year’s occupancy-right under a lease expiring Jan. 1, 1913, so that we may take possession on July 1, 1912. We pay him $1,000 outright for the privilege, under agreement that we shall pay the rent for the half year. To what account shall we charge the $1,000?
    Is it a capital or a revenue charge? Why?
    Suppose his lease had been for a term three years longer, at $8,000 a year, and therefore our lease could not become effective until January 1, 1916, and that we should have been willing to pay for the building the equivalent of $10,000 a year (for 13½ years, i. e., until January 1, 1926), for immediate occupancy. How much more than before should we have been willing to pay for his lease, supposing money to be worth 5%
    Should we charge the amount to revenue or to capital?
    How should we treat it a year later?

Source: Harvard University Archives. Harvard University. Mid-year Examinations, 1852-1943. Box 8, Folder “Mid-year Examinations, 1911-12″.

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ECONOMICS 18
Year-end Final Examination
1911-12

One question may be omitted.

  1. State clearly the relation of the journal, the sales book, the cash book, the sales ledger, and the general ledger; and illustrate your statement by telling what would be shown on each book for the following series of transactions. (Neither the illustration without the statement nor the statement without the illustration will be deemed a satisfactory answer.)

You sell John Doe, one of your many customers, goods for $1600; Doe gives you a draft on Richard Roe, which Roe accepts, for $1000; Doe later pays you $600 in cash, and Roe’s acceptance is paid in full.

  1. What is the effect on the balance sheet and on the income sheet of the following circumstances regarding depreciation?
    1. The property has been maintained at a cost of $5000.
    2. It has been in part maintained at a cost of $3000, a fund has been set aside for replacement of the parts not maintained amounting to $2000, and in a second year the fund has been used for replacement. (Show the two years separately.)
    3. Replacement has done more than maintain the property, by $2000.
    4. The property has been maintained out of a replacement fund, created from product, but owing to a fall in prices the fund is more than adequate for replacement and a balance of $2000 remains.
  2. The balance sheet of a business on Jan. 1, 1911 was as follows:
Fixtures $4,000 Proprietor $60,000
Accounts receivable 60,000 Bills payable 20,000
Merchandise 43,000 Accounts payable 30,000
Cash 3,000
$110,000 $110,000

The trial balance, taken before the books were closed, on Dec. 31, 1911, was as follows: —

Proprietor $60,000
Fixtures $4,000
Bills payable 22,000
Accounts receivable 82,000
Accounts payable 27,000
Merchandise inventory, Jan. 1 43,000
Cash 3,000
Purchases 263,000
Sales 318,850
Wages and salaries 18,000
Office expenses 5,000
Advertising 800
Rent, etc. 9,000
Losses, bad debts 1,000
Insurance 400
Taxes 750
Discounts taken 8,100
Discounts given 6,000
$435,950 $435,950

The balance sheet on Jan. 1, 1912 was as follows: —

Fixtures $3,000 Proprietor $62,000
Accounts receivable 82,000 Bills payable 22,000
Merchandise 24,000 Accounts payable 27,000
Cash 3,000 Allow. for bad debts 1,000
$112,000 $112,000

Show the complete income sheet for the year 1911.

  1. Tell what transactions not disclosed by the income sheet of 1911 were carried on in that year by the business for which figures were given in Question 3.

Was the condition of the business on Jan. 1, 1912, better or worse than it was a year earlier? Explain the grounds of your judgment.

  1. The following is an incomplete balance sheet of a national bank. All figures shown are correct. Tell what are the most probable omitted items, naming a reasonable figure (consistent with the rest of the sheet), and tell on what assumptions you determined the omissions.

Then show the complete balance sheet as it would be if your assumptions were correct.

Loans and discounts $1,200,000 Capital Stock $200,000
National bank notes on hand 7,000 Due to other banks 260,000
Legal tender currency 98,000 Individual deposits 1,300,000
Coin 95,000 Bank note circulation 20,000
Certified checks 8,000
Certificates of deposit 5,000
Cashier’s checks 3,000
$1,848,000 $1,848,000
  1. Suppose that you are the publisher of a book for which there has been for years a steady demand, that the demand is not likely to decline, and that your copyright has five years to run. Suppose the estimated profit over the cost of manufacture of this book is approximately $500 a year while the copyright endures, and that your “courtesy-right” in the book will probably be worth $200 a year for five years more. How should you find the value of the copyright?

Should your right in the book appear on your books of account, and should it affect your annual statements? If so, how and where?

  1. You deem two corporations to be entitled to equally good credit. Both have outstanding 5% bonds, with interest payable semi-annually. The bonds of corporation A run twelve years, and those of corporation B run ten years. Standard bond tables give the value of twelve-year 5% bonds, on a 4½% basis — which you deem fair — as $1045.97, and of ten-year bonds as $1039.91. On March 1, you have offered to you a bond of the issue of corporation A for $1057.50, or one of the issue of corporation B for $1051.25. Which is the better offer? Show the figuring to support your answer.
  2. What is the significance of the items starred on the following life-insurance balance sheet?
Bonds *Reserve $51,000,000
Stocks $30,000,000 *Present worth of future
Real Estate 3,000,000 instalments on matured
Loans on Mortgages 2,000,000 policies 250,000
*Loans on Policies 12,000,000 Accrued liabilities 2,500,000
*Premium Notes 7,000,000 *Reserve for equalization
Cash 1,000,000 of mortality 250,000
Accrued assets 1,000,000 Surplus 4,000,000
2,000,000
$58,000,000 $58,000,000

What is the difference between the two reserves? Between them and the surplus? Are the two starred assets presumably good or are they more or less doubtful than the other assets?

Source: Harvard University Archives. Harvard University — Examination papers, 1873-1915. Box 6. Bound volume, Examination Papers, 1912. Harvard University Examinations. Papers Set For Examinations in History, History of Science, Government, Economics […], pp. 60-63.

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Earlier Accounting Exams at Harvard

1900-01
1901-02
1902-03
1903-04
1904-05
1905-06
1906-07
1907-08
1908-09
1909-10
1910-11

Image Source: Woodcut of Luca Pacioli, “Father of accounting and bookkeeping” from his Summa de arithmetic, geometria. Proportioni et proportionalita (Venice, 1494). For more about Luca Pacioli.

Categories
Chicago Exam Questions Microeconomics

Chicago. Price Theory Prelim Exam. Summer Quarter, 1968

by Roger Vaughan (Chicago PhD 1977)

 

Links to previously posted Chicago prelim exams.

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CORE EXAMINATION

Price Theory
Summer, 1968

Preliminary Examination for the Ph.D. Degree

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your Code Number and NOT your name
Name of Examination
Date of Examination

Results of the examination will be sent to you by letter.

Answer all questions.  Time: 3 hours.  [Handwritten: Return question sheets with blue books.]

  1. (70 points) Indicate whether each of the following statements is true, false, or uncertain, and explain briefly
    1. The competitive demand for an input to a production process is never more elastic than the demand for the product of the production process.
    2. An ad valorem tax on the sale of gasoline for highway use would produce a more stable flow of revenue for the state than does the (existing) specific tax.
    3. If the growers of oranges increase their own consumption of oranges more than they increase the total output of oranges when orange prices rise, oranges must be an inferior good.
    4. Because a monopolist has no supply curve, one cannot predict the effect of, say, a ten per cent tax on his output.
    5. In designing an investment project, the firm should attempt to maximize the internal rate of return.
    6. It is inconsistent to explain the rise in the price of a security by “heavier buying” and a fall by “heavier selling.”
    7. For an individual, the sum of the income elasticities of demand for all commodities is unity, and similarly, the sum of their price elasticities is zero.
    8. Within a crop season, September to September, it is impossible for the actual June price to be below the actual March price of wheat because of storage costs.
    9. One would expect the price elasticity of demand for food to be lower in poorer countries than in rich ones simply because food accounts for a larger fraction of the budget in the former.
    10. If the marginal product of labor depends only upon the ratio of labor to capital, and similarly with capital, the competitive firm will have constant returns to scale.
    11. No product can have an elasticity of demand of unity throughout its entire range because no one can pay the nearly infinite price for extremely small quantities.
    12. In order that the amount of food marketed by the agricultural sector be inversely related to price, it is required that the income elasticity of demand for non-food items in that sector be increasing with income.
    13. An excise tax collected from the buyer can never differ in its effect from the same tax collected from the seller.
    14. If production occurs under conditions of constant returns to scale, the marginal product of an input always declines as the relative quantity of that input increases, hence short-run marginal cost always increases with increases in output.
  2. Essay Questions [Handwritten: “Part II. Answer all questions.”]
    1. (25 points)
      Ronald Coase has argued, in an important article on “The Problem of Social Cost” that in the absence of transaction costs, there would be no external economies: every one affected by an action would enter a contract to alter the action. Monopoly behavior has external diseconomies: the costs are borne by the customers but the benefits accrue to the monopolist. How, in the absence of transaction costs, would the monopolists and their customers behave?
    2. (30 points)
      Recent federal legislation authorizes a regulatory body to require various changes in automobiles to increase safety. The cost of the requirements for 1967-68 model cars is estimated at $50 to $100 per car, or $500 million to $1 billion in the aggregate.

      1. How will these regulations affect the prices of used automobiles?
      2. Assuming buyers of automobiles act “rationally” and with full information, are there any safety devices that are in the social interest that will not be installed in response to consumer demand?
      3. If automobile producers were made liable for all damages to occupants of automobiles in accidents, would the socially optimum amount of safety be built into automobiles?
    3. (25 points)
      Suppose that the armed forces wishes to recruit a given number of men. One alternative would be to set a wage such that the number of volunteers equaled the number desired. Another way would be to set a lower wage and to draft a number of men equal to the difference between the number wanted and the number volunteering. In the latter case, assume that each person receiving a draft call would be permitted to hire a substitute for himself or to sell himself as a substitute for some other person. Compare these two schemes in terms of the number of personnel secured, the total pay received by the men, and the sources of this pay. Do not concern yourself with either the existing scheme or probable changes therein.
    4. (30 points)
      The English are much concerned about a “brain drain,” that is, the emigration of highly educated workers. Answer the following questions, assuming constant returns to scale.

      1. Is there any difference, in the effects on the per capita income of those remaining behind, between the emigration of a professional worker and the emigration of a non-professional worker who takes an equivalent amount of capital with him?
      2. Suppose one unskilled worker emigrates with £100 (his per capita share of England’s capital). Will the per capita effects be different–on those who remain–than if one-third of the English labor force migrates?
      3. Reverting to the “brain drain,” will it make any difference–to those who remain–whether the education of the skilled emigrants was paid for by themselves or subsidized by the state?
      4. How will the immigration of these workers into the United States affect U.S. skilled and unskilled workers?

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1965-1968.”

Image Source: “The School of Chicago 1972” by Robert Vaughan at theHarvard University Archives. Papers of Zvi Griliches, Box 129. Folder “Posters, ca. 1960s-1970s”.

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Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

Categories
Exam Questions Harvard Public Finance

Harvard. Advanced Public Finance. Description, enrollment and final examination. Bullock, 1911-1912

As has been noted in other posts for the 1911-12 academic year at Harvard, the archival collection of final exams is incomplete with respect to the first semester of two semester courses such as Economics 16 “Public Finance (advanced course)” taught by Charles J. Bullock. The 1910-11 year post (linked below) gives the mid-year and year-end final exams for the course. Other than warning to “Mind the gap”, there is little to be done other that to hope that a copy of the mid-year exam pops up in some other archival location.

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Earlier Advanced Public Finance

Links to earlier course material for advanced course in public finance from Harvard, 1905-06 through 1910-11.

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Course Description
1911-12

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

The course is deroted 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. Undergraduates are admitted only by consent of the instructor.

Source: Division of History, Government, and Economics: 1911-12 (1st ed.). Official Register of Harvard University, Vol. VIII, No. 23 (June 15, 1911), p. 66.

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Course Enrollment
1911-12

Economics 16. Professor Bullock. — Public Finance (advanced course).

Total 13: 11 Graduates, 1 Senior, 1 Junior.

Source: Harvard University. Report of the President of Harvard College, 1911-1912, p. 64.

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ECONOMICS 16
Year-end Final Examination
1911-12

  1. Discuss the present status of the benefit theory of taxation.
  2. Discuss the present status of the theory of progressive taxation.
  3. Discuss the various reasons advanced to explain the failure of the general property tax in the United States. What light does Swiss experience throw on this problem?
  4. Discuss the principal methods proposed for remedying the defects of the general property tax in the United States.
  5. Discuss the incidence of taxes on wages and interest, also of taxes on regulated public service corporations.
  6. Discuss the present status of excise taxation in France, Great Britain, and the United States.
  7. Compare the views of Adam Smith and Bastable concerning the economic effects of public debts.
  8. Compare the history of the British debt with that of the French debt during the nineteenth century.

Source: Harvard University Archives. Harvard University — Examination papers, 1873-1915. Box 6. Bound volume, Examination Papers, 1912. Harvard University Examinations. Papers Set For Examinations in History, History of Science, Government, Economics […], p. 59.

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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).

Image Source: Charles Jesse Bullock in the Harvard Class Album 1915. Colorized by Economics in the Rear-view Mirror.

Categories
Exam Questions Harvard History of Economics

Harvard. History of economics through Smith. Description, enrollment, final exam. Bullock, 1911-1912

Screenshot

 

This year course also would have had a mid-year exam covering economic thought from the ancient Greeks through medieval writers. That exam has not (yet) been found, the 1911-12 materials are incomplete. Bullock’s course was well-established by 1911–12 so one can sample the earlier exams to plug the gap.

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History of economics courses
pre-1911/12

Links to earlier course material for History of Economics at Harvard, 1883-84 through 1910-11.

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Course Description
1911-12

[Economics] 15. History and Literature of Economics to the year 1848. Mon., Wed., and (at the pleasure of the instructor) Fri., at 11. Professor Bullock. (IV)

The purpose of this course is to trace the development of economic thought from classical antiquity to the middle of the nineteenth century. Emphasis is placed upon the relation of economics to philosophical and political theories, as well as to political and industrial conditions.

A considerable amount of reading of prominent writers will be assigned, and opportunity given for the preparation of theses. Much of the instruction is necessarily given by means of lectures.

No undergraduates will be admitted to the course who are not candidates for distinction in economics.

Source: Division of History, Government, and Economics: 1911-12 (1st ed.). Official Register of Harvard University, Vol. VIII, No. 23 (June 15, 1911), p. 60.

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Course Enrollment
1911-12

Economics 15. Professor Bullock. — History and Literature of Economics to the year 1848.

Total 6: 6 Graduates.

Source: Harvard University. Report of the President of Harvard College, 1911-1912, p. 64.

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ECONOMICS 15
Year-end Final Examination
1911-12

  1. In the economic thought of the sixteenth century what evidence do you find of continuity with previous economic thought? What new elements do you find?
  2. Discuss the economic opinions of Bodin, and his influence on later writers.
  3. Discuss the writings of Serra, Montchrétien, and Misselden.
  4. What claims have the following works to be considered scientific economic treatises: Mun’s “England’s Treasure,” Cantillon’s “Essai,” and Turgot’s “Reflexions”?
  5. Discuss English theories concerning the nature of capital and the rate of interest in the eighteenth century.
  6. Discuss the condition of economic thought in Europe at the middle of the eighteenth century.
  7. Compare Adam Smith’s views of capital with earlier views.
  8. Compare Smith’s theory of rent with earlier theories.

Source: Harvard University Archives. Harvard University — Examination papers, 1873-1915. Box 6. Bound volume, Examination Papers, 1912. Harvard University Examinations. Papers Set For Examinations in History, History of Science, Government, Economics […], pp. 58-59.

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Earlier versions of the course
by year and instructor

1899-1900. The History and Literature of Economics to the close of the Eighteenth Century. [William James Ashley]

1901-02. History and Literature of Economics, to the opening of the Nineteenth Century. [Charles Whitney Mixter]

1903-04. History and Literature of Economics to the opening of the Nineteenth Century [Charles Jesse Bullock]

1904-05. History and Literature of Economics to the year 1848. [Charles Jesse Bullock]

1905-06. History and Literature of Economics to the year 1848. [Charles Jesse Bullock]

1906-07. History and Literature of Economics to the year 1848 [Charles Jesse Bullock]

1907-08. History and Literature of Economics to the year 1848 [Charles Jesse Bullock]

1908-09. History and Literature of Economics to the year 1848 [Charles Jesse Bullock]

1909-10. History and Literature of Economics to the year 1848 [Charles Jesse Bullock]

1910-11. History and Literature of Economics to the year 1848
Charles Jesse Bullock]

Categories
Chicago Exam Questions Theory

Chicago. Economic Theory Prelim Exam. Summer Quarter, 1958

Element from Social Science Research Bldg at U of Chicago

 

Links to previously posted Chicago prelim exams.

___________________________

ECONOMIC THEORY PRELIMINARY EXAMINATION

SUMMER, 1958
AUGUST 1, 1958

ANSWER ALL QUESTIONS

The true-false-uncertain questions, as a group, and the essay questions, as a group, are to be given equal weight in grading the examination.

GROUP I

Indicate in the space provided the correct answer–True (T), False (F), or Uncertain (U). Explain your answer in the space provided on the pages following. Do not write more than can be included in the space provided. [Note: four T-F-U questions fit on a single page]

True (T), False (F), Uncertain (U)

  1. _____ A negative income elasticity of demand implies a positive price elasticity.
  2. _____ The demand curve for leisure is upward sloping.
  3. _____ Steel prices and output usually move together during business cycles. This means that the income effect of a rise in price is greater than the substitution effect.
  4. _____ If the price elasticity of demand is -1.0 each for commodities A and B separately, then the price elasticity of A and B taken together, the price elasticity of the joint demand for A and B, can be higher than -1.0 in absolute value.
  5. _____ When average costs are increasing, marginal costs are also increasing.
  6. _____ Prices that change only rarely constitute evidence of monopoly power.
  7. _____ A proportional income tax will have no effect on occupational choice, while a progressive income tax (same total revenue) does have an effect.
  8. _____ The price elasticity of demand for an input depends mainly upon the elasticity of demand for the final product and the relative share of total costs represented by payments for the specific input.
  9. _____ Inputs A and B are used in the production of the same product. An increase in the price of A (due to a shift in the supply function for A) will result in a decline in the price of B.
  10. _____ If the rate of interest is stable over time, firms may change the ratio of machines to labor.
  11. _____ When the borrowing and lending rates facing a firm differ, a firm may make the appropriate investment decision by maximizing the present value of the firm.
  12. _____ If the amount of capital which a firm can invest is fixed, it will choose the same investment whether it maximizes the average internal rate of return or the present value of the investment.
  13. _____ The long-run elasticity of supply of labor per person (supply measured in hours of work per lifetime) cannot exceed unity numerically.
  14. _____ The white persons who gain the most by market discrimination against Negroes are those with the greatest tastes for discrimination against Negroes.
  15. _____ If a union succeeds in raising wages, it will cause the ratio of the costs of the union labor to total costs to rise.
  16. _____ An effective minimum wage law will tend to cause labor to move out of employments having relatively great net non-pecuniary advantages.
  17. _____ Since the marginal productivity of labor rises as the ratio of capital to labor rises, wages will be higher in industries with high capital-labor ratios than in industries with low capital-labor ratios.
  18. _____ Long-run marginal cost cannot exceed short-run marginal cost.
  19. _____ If the price of wheat in market A is $2.00 per bushel and the cost of transporting a bushel of wheat from market A to market B is $0.10, the price of wheat in market B is $2.10.
  20. _____ If equal percentage changes in labor and land lead to the same percentage change in the output of wheat, and if labor yields increasing average products, the world’s wheat could be grown in a flower pot, if the pot were small enough.

GROUP II

  1. Describe briefly the major contributions of the following economists:

(1) W.S. Jevons
(2) A.A. Cournot
(3) V. Pareto
(4) Irving Fisher

  1. —
    1. The demand function for a product is P = 115-Q. The total cost of producing Q units in one plant is given by
      TC = 40Q – 10Q² + Q³. Only one-plant firms are allowed.

      1. What is the long run competitive solution (price and quantity)? [Handwritten margin note: “…and the number of firms in the industry”]
      2. What would be the approximate price charged and the quantity produced if there was only one one-plant firm and it maximized its profits. (Work only with round figures.) How much profit would it make?
    2. Assume now that a firm may have more than one plant. What is the monopoly solution? [Handwritten addition: “How much profit will it make?”]
  1. The C.E. Company, a mining company, currently operates a commissary at which employees of the company may obtain free of charge a variety of food and clothing items. The amount of each item that an employee may obtain per week may not exceed a specified amount (ration), the same for all employees. The company proposes to close the commissary next month and simultaneously to give the employees an increase in weekly wages equal to half the market value of the ration. The company, learning that you are an economist, has asked you whether the putting into effect of their proposal would increase, decrease, or leave unchanged the real weekly wages of its employees.
    1. Could you give them a definite answer without additional information? Explain.
    2. If your answer to (A) is “no”, what additional information, if any, would enable you to be certain that their proposal would decrease real weekly wages? Would increase real weekly wages? Would leave real weekly wages unchanged? Explain your answers.
  2. A study of the relationship between changes in employment by industry groups and changes in wage rates for the period from 1929 to date in the United States does not reveal a significant positive relationship between the two variables, i.e., larger changes in employment were not associated with larger changes in wage rates.
    Comment on this result in terms of the degree of competition in labor markets and the effect of wage differentials in inducing labor transfers.
    What would have been the implications if there had been a positive correlation between the variables? If there had been a negative relationship?

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1957-1965.”

Image Source: University of Chicago Photographic Archive, apf2-07449, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.

__________________________

Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

 

Categories
Exam Questions Harvard Socialism

Harvard. Economic Reform Schemes. Description, Enrollment, Final Exam. Carver, 1911-1912

1986 East Berlin

 

Something that might surprise contemporary economists is that in 1911-12 Karl Marx and Henry George were each allocated 30% of the final exam questions for Harvard’s course on Methods of Social Reform. Also worth mulling over for a moment is that socialism was identified as the polar opposite of individualism (as opposed to “capitalism”) in a one-dimensional political spectrum.

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Earlier Course Material

Links to earlier course material for Methods of Social Reform (Socialism/Communism at Harvard, 1893-94 through 1910-11.

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Course Description
1911-12

[Economics] 14b 2hf. Methods of Social Reform. — Socialism, Communism, the Single Tax, etc. Half-course (second half-year). Tu., Th., at 1.30. Professor Carver.

A study of those plans of social amelioration which involve either a reorganization of society, or a considerable extension of the functions of the state. The course begins with a critical examination of the theories of the leading socialistic writers, with a view to getting a clear understanding of the reasoning which lies back of socialistic movements, and of the economic conditions which tend to make this reasoning acceptable. A similar study will be made of the Single Tax Movement, of State Socialism and the public ownership of monopolistic enterprises, and of Christian Socialism, so called.

This course is open only to those who have passed satisfactorily in Course 14a.

Source: Division of History, Government, and Economics: 1911-12 (1st ed.). Official Register of Harvard University, Vol. VIII, No. 23 (June 15, 1911), p. 59.

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Course Enrollment
1911-12

Economics 14b 2hf. Professor Carver. — Methods of Social Reform. Socialism, Communism, the Single Tax, etc.

Total 65: 5 Graduates, 22 Seniors, 25 Juniors, 9 Sophomore, 4 Others.

Source: Harvard University. Report of the President of Harvard College, 1911-1912, p. 63.

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ECONOMICS 14b
Year-end Final Examination
1911-12

  1. To what extent does Marx’s definition of value approach the current definition, and wherein does it differ?
  2. How does Marx bring the wages of skilled labor under his theory of value, and how does he dispose of labor which produces something of no use, or of very little use?
  3. Discuss Marx’s use of the formulae C–M–C and M–C–M.
  4. Just how would you distinguish between a socialist and an individualist?
  5. In what respects does socialism resemble anarchism and in what respects does it differ?
  6. Describe one communistic society and state what light, if any, it throws on the subject of socialism.
  7. “The advocates of the single tax love to base their arguments on the ground of justice. In this they are certainly wise; for even though all other arguments were in its favor, if the justice of the single tax could be successfully impugned, it would be foredoomed to failure.” Do you fully agree with this? Give reasons for your agreement or disagreement.
  8. Do you believe the single tax to be just? Give your reasons.
  9. How would the single tax probably affect building enterprises in a city like Boston?
  10. Do you consider it possible to attain something approximating to equality of incomes under the competitive system, with private capital, private enterprise, and freedom of contract? If so, how; if not, why not?

Source: Harvard University Archives. Harvard University — Examination papers, 1873-1915. Box 6. Bound volume, Examination Papers, 1912. Harvard University Examinations. Papers Set For Examinations in History, History of Science, Government, Economics […], p. 58.

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Earlier Course Materials

Pre-Carver
Carver’s courses

 

Categories
Chicago Exam Questions Microeconomics

Chicago. Price Theory Prelim Exam. Winter Quarter, 1968

Links to previously posted Chicago prelim exams.

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PRICE THEORY

Preliminary Examination
for the Ph.D. and the A.M. Degree
Winter Quarter, 1968

WRITE THE FOLLOWING INFORMATION ON YOUR EXAMINATION PAPER:

Your code number and NOT your name
Name of examination
Date of examination

Results of the examination will be sent to you by letter

Answer all questions.  Time: 3 hours

  1. Indicate whether each of the following statements is True (T) or False (F), and justify your answer briefly.
    1. ________ Consider a competitive firm’s demand for a factor of production as a function of the factor price for given prices of other factors. In case A, also hold output fixed. In case B, instead hold the price of the product fixed. The elasticity of demand is greater for B than A.
    2. ________ Firms will devote no more resources to accident prevention when they pay the costs of employees injured by industrial accidents than they would if the employees bore the costs.
    3. ________ The demand elasticity for Ford cars is -4.2; the elasticity for Chevrolet cars is -3.0. If Ford’s market share is 1/3 and Chevrolet’s is 2/3, then the elasticity of both brands together is -3.4.
    4. ________ If Congress passes safety legislation outlawing the use of automobiles over 7 years old, in the long run, the number of automobiles on the road will be decreased but the annual purchases of new automobiles will be increased.
    5. ________ Nightclubs often have an admission or cover charge in addition to the price of food or drinks. This implies the absence of marginal cost pricing.
    6. ________ A patent usually entitles the owner of an invention to charge as much as he wishes for the right to use his invention. Hence, a patented cost-reducing invention will not affect the price of the product because the optimal royalty rate will just equal the cost reduction.
    7. ________ A rational person may gamble at unfair odds.
    8. ________ Since we observe that competitive firms operate their plants at a higher rate at business cycle peaks than at business cycle troughs, they must be operating in the range of rising short-run marginal costs.
    9. ________ The recent rise in the postage rate was accompanied by a “shortage” of stamps, providing us with an example of the Giffen paradox.
    10. ________ “Time is money,” hence an invention which decreased the hours required for sleep would lead to a rise in real income as conventionally measured.

II. —

    1. How is it possible for coffee beans of the same brand and same freshness to sell at a higher price per pound than the same coffee ground and canned?
    2. The same typewriter could have recently been bought at $130 from Toad Hall, $125 from Sears under its own label, and for $117 from a mail-order discount house (Monroe). Does this mean that the retail typewriter market is very imperfect?
    3. Some years back, when the Federal campaign against cigarette smoking was beginning, Time reported that “when someone offers a cigarette to pipe-puffing Surgeon General Luther Terry, he always grabs it. ‘Every one I accept I tear up,’ he says. ‘That way there’s one less cigarette.'”
      Analyze the economics of the Surgeon General’s policy. In doing so, assume, of course, that a substantial class of people with similar beliefs behave the same way, so the effect is at least potentially appreciable. Would it contribute to his objective of reducing smoking? If so, through what channels?
  1. Suppose a traffic department enforcing parking regulations in the business section of a large city has a fixed force available to it which means an approximately constant probability p that an illegally parked car will be ticketed. Assume that each person has the choice of parking legally at X dollars per day or illegally, paying a fine of F dollars each time his car is ticketed.
    1. Assume first the sole aim of the traffic department is to discourage illegal parking. Assume that all drivers have constant marginal utility of income and try to maximize expected money income (i.e., minimize their expected loss from parking). What fine F should the traffic department impose on parking in order to achieve its aim?
    2. If all drivers maximized expected utility, had diminishing marginal utility of income, and experienced neither utility nor disutility from obeying the law, how would this affect your answer to a? If they had increasing marginal utility of income?
    3. Suppose the traffic department received all the fines and desired to maximize its expected revenue. How should it set the fine F? Indicate what additional information, if any, it needs in order to do so.
  1. Assume that production functions are Cobb-Douglas of the first degree and that competition reigns. Let there be only two factors, say, labor (L) and capital (C).
    1. What is the Cobb-Douglas form?
    2. Show that the share of wages in the total output is independent of the quantity of labor, and equal to the exponent of labor, say, a.
    3. Let there be one additional worker.
      1. Because wages are equal to marginal product, he gets the whole of what he adds to output.
      2. Yet by (b), labor gets only the fraction a of the additional output.

How do you reconcile (i) and (ii)?

  1. “The exemption of college students from the draft has been attacked as discrimination in favor of middle and upper income classes. Yet a cold-blooded economic analysis shows that in fact it promotes greater equality in the distribution of income, and so benefits the lower-income classes.”
    Provide the “cold-blooded economic analysis.”

Source:  Harvard University Archives. Papers of Zvi Griliches, Box 130, Folder “Preliminary Examinations, 1965-1968.”

__________________________

Preliminary and Field Exams from the economics graduate program of the University of Chicago

Note: The chronological ordering of quarters at the University of Chicago during a calendar year goes Winter, Spring, Summer, Autumn. For this reason the following is arranged chronologically.

 

Categories
Libertarianism Popular Economics Wing Nuts

Northwood Institute. A Libertarian Credo. V. Orval Watts, 1973

In the Beginning…

…Mr. Leonard Read became general manager of the Los Angeles Chamber of Commerce, the largest C. of C. in the country and, I believe, the most enlightened. He had me chosen as a member of his board of directors, which position I have held since 1939. Another result was that the Los Angeles Chamber of Commerce added an economic counsel to its staff, Dr. V. O. Watts, a former student of mine at Harvard.

     Through the influence of Messrs. Mullendore [president of the Southern California Edison Co.] , Read, Watts, and myself, the L.A. C. of C. became the spearhead of an active crusade for the return to the principle of freedom of enterprise. That crusade seems to have made an impression, since nearly everybody now (1947) talks in favor of free enterprise and against the police state. If I had something to do with starting Mullendore, Read, and Watts on this crusade, it may turn out to be the most important work of my life.

Source: Thomas Nixon Carver, Recollections of an Unplanned Life (Los Angeles, 1949), p. 241.

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The following artifact is found in the papers of V. Orval Watts at the Hoover Institution Archives. It bears no date, but essentially the same document has been posted as an article at the Foundation for Economic Education with a date of March 1, 1973 with a prefatory note “This article is from remarks at a recent faculty meeting [at the Northwood Institute].” The introductory paragraphs differ and there is an interesting obiter dictum added to the FEE version that “our rules prohibiting the use of liquor and marijuana and requiring the women students to return to the dormitories at a certain time” are not coercive.

V. Orval Watts, Harvard Ph.D. (1932), was a disciple of Harvard Professor Thomas Nixon Carver, his initial academic career morphed into becoming an apostle of laissez-faire, anti-Keynesianism, anti-globalism, and anti-communism. Ultimately he continued his crusades as the economics research pillar at the Judeo-Christian libertarian Northwood Institute (now Northwood University). Watts’ biographical details can be found in a 2018 post and his graduate economics record at Harvard has also been transcribed by Economics in the Rear-view Mirror.

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THE NORTHWOOD IDEA

By V. Orval Watts, Ph.D.
Northwood Institute

NOTE ON AUTHOR

Dr. V. Orval Watts has served as an inspiration and mentor for colleagues and the students of Northwood Institute for almost as long as the College has existed. Organizations grow and prosper because of their distinctive personalities. Ours has been molded and maintained by Dr. Watts. As director of Economic Education, he has reminded us of what we can be, if we will. More than this he carried the message of freedom to every corner of our country for more than six decades. His explanation of the Northwood Idea is a declaration of beliefs around which this institution has been built.

Dr. David E. Fry
President

Introduction: The Northwood Idea

By V. Orval Watts

The Northwood Idea — the thought that went into the founding of Northwood Institute — is as conservative as The Ten Commandments or The Golden Rule.

It is as liberal and progressive as the gains that come to humans as they learn to live by these principles.

Yet this does not make The Northwood Idea new or different. “Education,” we hear again and again, is the one way to solve our problems of crime, poverty, prejudice, racism, and war. Particularly in these United States, schooling in regard for one another’s welfare and in the skills necessary for making ourselves useful in a peaceful society are what every parent and teacher want for our huge investments in the world’s greatest educational effort.

This schooling, we all agree, should teach the ways of peace, goodwill and mutual aid.

Yet crime — especially juvenile crime — is higher than ever and is increasing faster in our cities and states where these expenditures of time and resources are greatest. Levels of literacy and self-discipline actually rose faster in the days before these great investments in compulsory and universal schooling.

The menace of terrorism, war, economic breakdown and famine is greater despite advances in technology which make peaceful cooperation more fruitful than ever before in human history. They offer the opportunity to abolish hunger, famine and pestilence forever.

Clearly something is wrong or lacking in our systems of schooling. At least, the founders of Northwood Institute thought so. Therefore, they ventured and risked greatly to offer something different from the general run of college schooling. My work and contacts with these men and women, and with their helpers and supporters, almost from the beginning of this institution, make me think of their aims — The Northwood Idea — in these terms:

First, the philosophy of Northwood’s founders springs from certain oft-forgotten aspects of the Judeo-Christian Ethic, or culture. In particular, it implies firm belief in the fact of personal, individual responsibility.

Second, the founders and supporters of Northwood Institute have shown by their lives and dedicated efforts that they look on work not merely as the means for obtaining the material necessaries and comforts of life but also as the way to what some call “mental health.” Strenuous and continuing effort in the hope of achieving a better life for oneself and others they see as essential for spiritual (psychological, emotional, mental) well-being.

Finally, they recognize that human progress depends on freedom for business enterprise. This requires private property. It means freedom to buy and sell, freedom to advertise and dicker, freedom to lend and borrow, and freedom to save and invest for profit.

This free-enterprise business, they believe, has been essential in the rise of great civilizations. It arises with acceptance of individual responsibility, the work ethic, and the self-discipline necessary for freedom.

I. THE JUDEO-CHRISTIAN ETHIC

As to the Judeo-Christian Ethic, I’ve been tempted to use instead the phrase “Bourgeois Ethic,” meaning the ethic of the tradesman, but Karl Marx and others have given that phrase so nasty a connotation that I know I would have two strikes against me at the outset if I called our moral code the “Bourgeois Ethic.” Yet, whatever we call it, the moral basis for our Northwood philosophy is the ethic which is necessary for a good life as a trader or financier.

The Idea of Individual Responsibility

This ethic begins with the idea of individual responsibility. That concept is basic for the Judeo-Christian Ethic.*

* The Islamic faith, we should note, stems from the Judeo-Christian ethic and theology.

The Ten Commandments and the moral injunctions of both the Old and the New Testaments were always directed to the individual: “Thou shalt have no other gods before me”; “Thou shalt not make unto thee any graven image”; “Honor thy father and thy mother: that thy days may be long upon the land which the Lord thy God giveth thee.“

Note that “thou,” “thy” and “thee” are singular pronouns, not plural as is “you” or “your.” Therefore, these ancient commandments were directed to one person, the individual, who is thereby charged with responsibility for what he chooses to do. They take it for granted that humans can choose. Our actions are not determined by instinct.

In fact, humans must choose. That is what individual responsibility and self-determination mean. Ideas and acquired values determine our specific actions, and they may prompt us to ignore various influences in the outside environment. We can direct our own actions to prolong and enrich our lives, or we can choose suicidal paths as people choose to smoke when they have abundant evidence that it shortens life. We can choose to jump off cliffs, we can choose to play Russian roulette; or we can choose to follow ways of life, ways of health and well-being.

The Idea of Moral Law

Of equal importance in the Judeo-Christian Ethic is recognition of the enduring nature of Moral Law. The essence of this moral law is summed up in the “Golden Rule,” and it derives from the fact that humans need one another.

Without other human beings, we cannot be born, cannot be reared, cannot prosper; and to have the cooperation of other humans — to avoid the conflicts which would be suicidal for humans — we must follow the “Golden Rule.” When we apply that rule in practice, we find it is the unifying principle of these commandments that refer to the relations between the individual and his fellows: “Thou shalt not steal,” “Thou shalt not kill,” and “Thou shalt not bear false witness.”

Now, it should be clear that obedience to Moral Law means voluntary cooperation and freedom. If we don’t steal, we leave other persons free to use their talents in peaceful and cooperative ways to produce goods for their own use, for exchange, or for gifts to others, such as gifts to one’s family or heirs.

Therefore, we have a state of individual freedom if we live by the “Ten Commandments.” We have private property and numberless associations for voluntary cooperation. Humans develop as humans and make progress only in this condition of individual freedom and voluntary association established by adherence to these moral principles. Therefore, these moral principles are antecedent to and take precedence over all man-made laws and customs.

Respect for Property

In other words, these enduring moral principles require of us respect for the property rights of other people — that is, respect for their rights to control their own persons and for their rights to control those things which they obtain in voluntary cooperation, whether by gift, by voluntary exchange, or by the productive use of these things. Living by these principles requires that we fulfill our contracts, that we speak the truth, and that we revere the laws of Life and Nature. The first four of The Ten Commandments tell us of this need for reverence: a Higher Authority enforces laws vastly more enduring and exacting than the statutes of kings and parliaments.

We should note, incidentally, that this voluntary cooperation and exchange is doubly productive of benefits in contrast to the one-sided gain that anyone may get by coercion, as for example, by burglary, by slavery, or by taxation. In voluntary cooperation, all participants must benefit if the cooperation is to continue, for if it is voluntary, anyone may withdraw when he feels he is not benefiting, when he feels that the gains are distributed unjustly or going entirely to one person or group at the expense of the time and energy of others.

We should note also that living by the Golden Rule involves respect for privacy — the right to be left alone and the right to choose one’s associates. Coercion — the attempt to compel people to associate with others — leads to conflict rather than to the attitudes and actions which are mutually beneficial. Freedom established by the Moral Law of the Golden Rule and the Ten Commandments includes the moral right to withdraw from an unwelcome contact with other persons, as well as the right to cooperate freely in mutually beneficial ways.

As Paul wrote in his “Second Letter to the Corinthians” two thousand years ago, “Be ye not unequally yoked with unbelievers; for what fellowship hath righteousness with unrighteousness and what communion hath light with darkness? … Wherefore come out from among them and be ye separate saith the Lord … and I will receive you.” (II Cor. 6:14-17)

II. EMPHASIS ON WORK AND THRIFT

Next, I wish to call attention to Northwood’s emphasis on work and thrift as marks and means of human progress. It is fashionable in some circles nowadays to disparage both of these values. But, work is merely persistent, purposeful effort. It is investment of human time and energy for long-range, indirect benefits.

Long-range benefits are those that occur in the future. Indirect benefits are those that may first benefit another person, but bring a return benefit of some sort to us later.

Such planned, purposeful effort for a long-range or indirect benefit is surely necessary for human survival and progress; and the traits of character and personality developed by such effort we regard as virtues.

Thrift is the postponement of present consumption in order to obtain greater satisfactions in the future. Like work, it requires the highest human qualities of understanding and imagination to foresee the future and to hold it in mind in order to gain the necessary self-restraint.

In short, work and thrift require understanding, self-control. They are means, not only of self-development, but of service to others.

We’d Still Live In Caves

Where would we be today had it not been for the thrift and work involved in the creation of our buildings, and the production of the myriad tools, or capital goods, that we use? The answer is we would still be living in caves, scratching out a short-lived, hand-to-mouth existence derived from the roots and grubs we could dig up, the small animals we could catch in our hands, and the berries we could get in season.

Everything that we call the material aspects of civilization, and the moral and spiritual ones as well, our understanding that enables us to live longer, to live better and to cooperate — all of this comes from thrift and work, the accumulations of thousands of years of human effort, inventiveness, planning, thrift and self-discipline.

This Puritan Ethic — this system of values, this way of life — is essential to progress. It is essential not only for economic progress but also for developing the qualities that are most distinctively human, the qualities that make us humans. It is mental, moral and spiritual “therapy,” to use a modern cliche.

III. THE IMPORTANCE OF BUSINESS

Finally, if we are to have cooperation, we must exchange services; and as the cooperation gets more and more complicated, we need specialists to work out the terms and procedures of the multitudinous exchanges. Therefore, we must use money and credit; and we must have traders and financiers, advertisers, brokers and salesmen, accountants and collection agencies to complete the exchanges, including those exchanges which are made over a period of time and which therefore require credit and finance.

Finance is the monetary aspect of credit. Credit is merely a delayed exchange, an incomplete exchange. In every civilized society, most exchanges take time to complete because they are indirect, three-cornered or four-cornered exchanges, taking place over a distance and involving roundabout capital-using methods of production. In all such time-consuming transactions, we must have credit (trust and waiting). Therefore, money, credit and financial experts are as necessary for civilized life and progress as are tools and machines, mechanics, and engineers.

Business, then, means those aspects of voluntary cooperation which we call commerce and finance, and the function of the businessman is to promote, inspire, and guide cooperation. He organizes and teaches competitive cooperation — cooperation to provide better opportunities for life and for a more abundant life. These business activities — organizing, inspiring, leading and teaching cooperation — promote development of the highest qualities of mind, character and personality.

Now, from time immemorial — from the first introduction of money and the specialists who traded and promoted trades — business has been widely regarded with suspicion and looked down upon as a degrading occupation. In primitive societies, the view prevails that a merchant or moneylender profits only at the expense of producers. This belief helps explain why such societies remain backward, or “under-developed.”

Of course, this belief is an entire misjudgment as to what most of a businessman’s wealth consists of and what he contributes to the value of other producers’ services and incomes. Most of his wealth consists of the means for serving his customers, and he contributes some of the most essential ingredients of human progress.

Wherever this disparaging attitude toward business becomes general, we find that business is harassed, regulated, plundered and repressed. Under such persecution, the character and wisdom of businessmen tends to fall.

Where opinion-makers teach that business is a dishonest racket, then those who are willing to be racketeers or cheats will monopolize business, while achievers who value the good opinion of their fellows will choose other occupations, such as religion, politics and the military. Then we find the kind of government the Pharaohs had in ancient Egypt, or that prevailed as the Roman Republic gave way to a welfare state Empire. Under such oppressive governments, a businessman must be something of a trickster to survive.

Spreading Hostility

As hostility to businessmen grows, politicians tax them more heavily, while debasing and inflating the currency to maintain an illusion of prosperity. Then, when these policies cause rising price levels, a deluded populace demands price controls, which ambitious politicians are all too ready to impose.

The resulting shortages and “black markets” provide further excuses for more government action to combat these supposed evidences of private “greed.”

This cancerous growth of government produces political “leaders” who promise peace and plenty even while they squander the fruits of industry in pauperizing the poor and waging “perpetual war for perpetual peace.”

The result must be, sooner or later, a spreading decline in the quality of life despite (or because of) the increasing largess to “the poor” and the privileged, the rise of great new public works, and the display of awe-inspiring armaments.

Civilization progresses when business is widely regarded as Horatio Alger represented it in his stories seventy-five or more years ago. In those once-popular tales, work and thrift in honest business service were the high road to personal success in the broadest sense of that word. That view of business helped attract able, enterprising youths into business careers. It prevailed in this country long before Alger wrote and helps explain the astounding economic and cultural progress of the United States during the past two centuries.

On the other hand, insofar as we lose the Horatio Alger understanding and spirit, we succumb to increasing paternalism and despotism, collectivism and war, which demoralize and belittle the individual and produce a wide-spread cultural decline. This retrogression has happened time and time again in history, and if we don’t learn the lesson from this history, we shall be doomed to repeat it.

Every nation has developed and flowered — with art, music, and the other ornaments and means of civilization — only on the basis of flourishing business, trade, commerce. This was true of the Phoenicians, Ancient Greece, and Ancient Egypt, the Chinese civilization, the Byzantine Empire, Venice, Florence, Spain, England, France, Germany and the United States. Go through the history of each and you’ll find in its origins that period in which commerce and finance were highly regarded and relatively free in a developing civilization.

Again and again, however, these eras of progress have ended as the intelligentsia became worshipers of the Almighty State. Then these intellectuals — scribes and priests — became more and more scornful of businessmen; and business lost its vision because it lost its men of vision. Men of talent and imagination, instead, accepted the faith of the state-employed intellectuals that a well-schooled elite must make more and more choices for the general run of the population and compel the inferior masses to accept this planning and direction of their lives.

Submerging the Individual

With this elitist excuse for tyranny, governments organize militaristic and imperialistic gangs to substitute forms of slavery for the voluntary cooperation of free individuals. Then, as in Communist countries today, even the ablest of the ruling bureaucracies find that any individual is expendable — trapped and exploited or liquidated — as millions of humans are sacrificed on the altars of Planned Perfection. The Moral Law of the Golden Rule and of the Ten Commandments may be violated, but not with impunity. He who harms others, harms himself; he who deceives another, cheats himself.

This faith in Moral Law permeates the philosophy of our Northwood administration and faculty. Along with it goes insistence on the fact of individual responsibility and a broad, long-range view of personal success. A businessman’s moral responsibility is no less than that of a teacher, physician, minister, artist or writer.

Essential to The Northwood Idea, then, is appreciation of the unlimited opportunities for character development in voluntary business enterprise.

Temptations correspond to the opportunities, and each occupation has its own peculiar temptations as it has its own peculiar opportunities. As few find the “strait gate” and “narrow way” of righteousness in other walks of life, likewise few businessmen will claim that they have always followed the right path in their work. Only those who look for business profits in life-supporting efforts that are mutually beneficial can achieve success in the true meaning of that word.

This objective may be the most distinctive feature of The Northwood Idea — the view that our graduates should look on business not merely as an easier way to attain ease and affluence but also as an opportunity for utilizing their highest human qualities and attaining lasting satisfaction in a life well spent.

Image Source:  Freedom School. Newsletter (January 1964).

Categories
Distribution Exam Questions Harvard Theory

Harvard. Wealth Distribution. Course description, enrollment, and final exam. Carver, 1911-1912

In preparing this post I found myself pursuing the c.v. of Thomas Nixon Carver’s teaching assistant in 1911-12, Arnold Warburton Lahee. Turns out that Lahee switched careers at age fifty, becoming a landscape painter en plein air. His path to the completion of the requirements for the economics PhD at Harvard was long (about 22 years between his A.B. and PhD) due to work-(PhD) life balance issues.

Carver’s course content can be gleaned from the final examination questions at the end of the post. 

Links to previous Harvard exams on distribution
1904-05 to 1910-11.

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Meet the Course Teaching Assistant
Arnold Warburton Lahee (1888-1976)

Arnold Warburton Lahee.
General Examination Passed, February 1914

General Examination in Economics, Wednesday, February 25, 1914.
Committee: Professors Bullock (chairman), Taussig, Gay, Ripley, Anderson, and R. B. Perry.
Academic History: Harvard College, 1907-11; Harvard Graduate School, 1911-12, 1913—. A.B., Harvard, 1911; A.M. ibid., 1912. Assistant in Economics, Harvard, 1911-12; Professor of Economics, University of Vermont, 1912-13.
General Subjects: 1. Economic Theory and its History. 2. Economic History since 1750. 3. Sociology. 4. Statistics. 5. Public Finance. 6. Philosophy.
Special Subject: Public Finance.
Thesis Subject: “Municipal Expenditures in Massachusetts.”

Source: Harvard University Archives. Harvard University, Examinations for the Ph.D. (HUC 7000.70), Folder “Examinations for the Ph.D., 1913-14”

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ARNOLD WARBURTON LAHEE
From the 10th year report Class of 1911.

Born at Hingham, Mass., May 7, 1888.
Parents: Henry Charles Lahee, Selina Ida Mary Long.
School: Cambridge Latin School, Cambridge, Mass.
Degrees: A.Β. 1911; Μ.Α. 1912.
Married: Gladys Hughes Livermore, Cambridge, Mass., Dec. 21, 1914.
Child: Katharine Livermore, Dec. 11, 1915.
Occupation: Economist.
Address: (Home) 28 Hamilton Road, Glen Ridge, N. J. (Bus.) Mechanics & Metals Nat’l Bank, 20 Nassau St., New York, N.Y.

THE first four years after graduation I spent in study and teaching: 1911-1912, I obtained my M.A. at Harvard; 1912-1913, I taught at the University of Vermont; 1912-1913, passed my general examinations for Ph.D. (February) and started to prepare for finals, specializing in public finance; and 1914-1915, taught at the Carnegie Institute of Technology, Pittsburgh. I then turned to active economic investigation, spending two years in the New York Bureau of Municipal Research. During this time I was employed in connection with the New York City Central Purchasing Commission, the New York State Senate Committee investigation of the Civil Service, and a study of the New York City Budget system under the Mitchell administration.

When the United States entered the War, I found that, in spite of Plattsburgh training (summer of 1916), deficient eye-sight disqualified me for active service. After joining for a while in the promotion of the Patriotic Service League in New York and Boston, and spending three or four months with the New Jersey State Chamber of Commerce, I seized the first opportunity to go to Washington, with the U.S. Tariff Commission. Shortly after my arrival, however, the War Trade Board requested my services and I entered the Bureau of Research as special economist on the Central Powers. After the Armistice, the State Department persuaded me to continue my work in the office of the Foreign Trade Advisor, but in June 1919 I accepted an attractive offer of the Mechanics and Metals National Bank, where I am now located in charge of its Department of Foreign Trade Extension.

Everyone has his pet regret. Mine is that in college I worked my way through on scholarship instead of being satisfied with Bs and Cs, spending more time in college activities, and earning my way through drudgery and hard knocks — but real experience (e.g., canvassing, etc.). Better to take more time, perhaps, but build up a broad foundation of practical experience and valuable friendships. Scholarship is only one factor out of several in the secret of success.

Source: Decennial Report of the Secretary of the Harvard Class of 1911 (1921), pp. 241-242.

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Lahee’s Book

Arnold W. Lahee. Consultant on Foreign Markets; Former Head of the Department of Foreign Trade Extension of the Mechanics and Metals, National Bank of New York. Our Competitors and Markets: An Introduction to Foreign Trade. New York: Henry Holt and Company, 1924.

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From Charles H. Haskins 1 Apr 1924 letter to Frank W. Taussig: “Lahee’s first thesis on the New York City Budget was turned down [by Bullock, Day and Munro] some years ago [1917], and this work [Note: his book Our Competitors and Markets (1924)] has been done more or less commercially without the supervision of any member of the Department.”

The thesis was approved by Young, Williams and Copeland in April 1924. He failed his Special Examination on June 4, 1924. He passed his second try on October 11, 1932 (Examined by Taussig, Williams and Harris). Frank W. Taussig was the committee chairman for both examinations.

Source: Harvard University Archives. PhD Candidates Receiving Degrees in 1933 A-Z. Box 13. Folder “A. W. Lahee”.

Lahee Submitted his Book for his PhD Thesis

ARNOLD WARBURTON LAHEE, A.B. 1911, A.M. 1912. Subject, Economics. Special Field, International Relations. Thesis, “Our Competitors and Markets.” 72 High Street, Glen Ridge, N.J. [Degree awarded in February 1933]

Source: Harvard University. Report of the President of Harvard College, 1932-1933, p. 127.

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Lahee Becomes a Painter

The Times-Argus. Barre-Montpelier, Vt. (July 23, 1969), p. 23.

Agile And Artistic At 81
Dr. Lahee Bound To Climb The Hump

By STEVE McLEOD

NORTHFIELD — Dr. Arnold Lahee of Winch View Road, Northfield, is 81 but he doesn’t believe it. He will admit that climbing Camel’s Hump with art equipment on his back is becoming difficult now, but in the same breath he vows “I’m going to get to the top of Camel’s Hump this year or bust.”

Dr. Lahee combines a knowledge and appreciation of the outdoors with considerable artistic talent and an unusual painting style to produce some excellent landscape paintings.

His paintings have been exhibited in the Smithsonian Institute in Washington, D.C., in Europe and in several art museums around the United States. Currently he has a revolving exhibit at the Northfield Savings Bank and a thirty-six painting exhibit at the Chittenden Trust Co. in Burlington. The State Capitol dining room and Vermont Technical College are among other Vermont locations where his work has been exhibited.

Dr. Lahee, an economist by profession, has received several awards in connection with his artistic ventures, including most recently the Tercentennial Medallion from the A.A.P.L. when he retired as president “for the promotion of American Art during his administration.”

He did not begin painting until he was 50 and he began then only through “pure chance and three lucky circumstances.”

An underexposed picture provided the spark for his preliminary artistic ambition. His first paintings were on photos. This practice is frowned upon in artistic circles, but Dr. Lahee is glad he started in that fashion.

The second lucky circumstance occurred when he found some oil paints in the home of his deceased aunt.

After he produced a number of paintings with the oil paints, he became acquainted with an art photographer when — not saying that the photographer was an expert — he offered to show him how to take better pictures. The photographer belonged to an art club of some kind, and invited Dr. Lahee to display his paintings to the club where they were well-received.

Finally, the Wagner Act “threw me [Dr. Lahee] out of a job and I went to art class.” The class sealed the marriage between Dr. Lahee and painting. Once he had begun painting, Dr. Lahee wished that he had started years earlier.

He said that he did pretty well in grammar school art other than that; he had never noticed that he had any artistic talent until after he returned to painting.

The only other time Dr. Lahee thought of taking up painting before he was 50 was when he briefly considered entering the field of illustrated advertising.

“I started with the idea that portrait painting required more skill than landscape painting,” said Dr. Lahee, “and I was going into painting portraits but a few bad experiences switched me to landscape painting.”

The bad experiences involved people who requested portraits and later tried to keep them without paying Dr. Lahee.

“I still have those paintings in the cellar,” chuckled the hearty Northfield resident.

“Incidents like those sicken me so and I love nature and camping so I turned away from doing people,” explained Dr. Lahee.

Dr. Lahee still etches portraits occasionally, but the majority of his work is of the landscape variety.

He admires all aspects of nature. Recently, he has been fascinated by the beauty of clouds and is intent on capturing that beauty on his easel soon as possible.

“I’m frustrated up here because there are so many chores,” he says. “I keep vowing that I’m going to make a painting of the clouds but by the time I get my paints out the formations have moved.”

Dr. Lahee has rigged up a knapsack in such a way that his art equipment, easel and all fits in it.

Thus, he paints many of his landscapes from unusual vantage points from deep within nature’s kingdom, instead of painting them as a detached observer. His painting acquires a rugged naturalness through the use of these vantage points.

Would you believe Dr. Lahee is a radical? In the art world, he is anyway. Instead of using a brush for his landscapes, he uses a knife.

“With a brush you can paint every twig and leaf,” he explains. “With a pallet knife you just slap it on. It gives you a freedom and a thrill, I don’t know many who do that but that doesn’t matter.”

When asked if he considered himself a commercial painter, Dr. Lahee chuckled, “I paint mostly for my own pleasure. I’d starve if I had to rely on painting for my livelihood.”

He added that he also enjoys activities that complement painting, such as art demonstrations for ladies’ clubs and the like.

However, he has sold several paintings. Selling a painting which he deeply admires gives him mixed feelings.

“Sometimes it hurts me that they’re gone,” he says. “I painted one with a lot of memory and people wanted to purchase it so I let it go and have been kicking myself ever since. Later I had another that was saturated with memory and I turned down an offer for that one.

“At the same time it gives me a kick to get offers for my favorite paintings, though, because then I know people like what I like.”

Dr. Lahee can’t choose a standout painting from his collection.

“Oh I like some better than others,” he reminisced, “but I like several for different reasons. Almost every painting I make relates to an incident in my life and each evokes its own beautiful memories. And I don’t think I could judge the quality of my individual paintings any way.”

Dr. Lahee lives with his wife, Gladys, in a ranch home nestled among several trees high above the Northfield valley. Their only child, Katherine, lives next door.

“We’ve been married only about 51 years,” says Dr. Lahee, “or maybe it’s more, I don’t know. It could be 54 years.”

When you’re climbing mountains, camping and painting at age 81, a few years don’t make much difference.

 

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Course Description
1911-12

14a1hf. The Distribution of Wealth. Half-course (first half-year). Tu., Th., at 1.30. Professor Carver. (XIV)

This course begins with an analysis of the theory of value. The attempt is then made to formulate a positive theory of distribution helpful in explaining the actual incomes of the various classes of producers. Finally the question of justice in distribution is considered. This course is open only to students who have passed in Economics 1.

Source: Division of History, Government, and Economics: 1911-12 (1st ed.). Official Register of Harvard University, Vol. VIII, No. 23 (June 15, 1911), p. 59.

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Course Enrollment
1911-12

Economics 14a 1hf. Professor Carver, assisted by Mr. A. W. Lahee. — The Distribution of Wealth.

Total 94: 6 Graduates, 32 Seniors, 40 Juniors, 11 Sophomores, 1 Freshman, 4 Others.

Source: Harvard University. Report of the President of Harvard College, 1911-1912, p. 63.

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ECONOMICS 14a
Mid-year Final Examination
1911-12

Read all the questions carefully before beginning to answer any of them.

  1. Is there any reason to expect that the means of satisfying human desires should always exist in just the right proportions to satisfy those desires? What bearing does your answer to the above question have upon the problem of value?
  2. Is there any reason to expect that the supply of the various kinds of human talent should always be proportionate to the need for them? What bearing does your answer to this question have upon the problem of wages?
  3. Is there any reason to expect that the supply of other factors of production should always be proportionate to the need for them? What bearing does your answer to this question have upon the problem of rent and interest?
  4. Why does the value of a consumable article tend, other things equal, to fall as its supply increases?
  5. Why does the value of a productive agent tend, other things equal, to fall as its supply increases?
  6. What is the effect on the value of a given productive agent when the supply of other productive agents increases, other things equal? Why?
  7. Is there any connection between such terms as “non-competing groups” “supplementary goods,” and “wages fund”?
  8. How would you distinguish between diminishing returns from land and the economy of large scale production?

Source: Harvard University Archives. Harvard University — Examination papers, 1873-1915. Box 6. Bound volume, Examination Papers, 1912. Harvard University Examinations. Papers Set For Examinations in History, History of Science, Government, Economics […], p. 57.

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From earlier semesters

1904-05
1905-06
1907-08
1908-09
1909-10
1910-11

’The course content is undoubtedly captured in Carver’s 1904 book The Distribution of Wealth which was reprinted several times during his lifetime.

Image Source: 1964 painting by Arnold W. Lahee (Harvard PhD, 1933).