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Chicago. First detailed announcement of Political Economy program, 1892

 

The founding Head-Professor of Political Economy, J. Laurence Laughlin, arrived at the University of Chicago in June 1892. The following printed announcement of the programme of courses in political economy ends with a call for fellowship applications with a last-submission date of June 1, 1892. Thus we can presume that Laughlin had organized his department’s course offerings and staffing before he physically reported for duty,  and I would guess this announcement was published in the late winter/early spring of 1892. Besides being an artifact we can date to the Big Bang moment of creation of the University of Chicago’s department of political economy, the announcement provides us relatively thick descriptions of the respective courses in the political economy programme at that early date.

 

_______________

THE UNIVERSITY OF CHICAGO
1892-3

PROGRAMME OF COURSES IN POLITICAL ECONOMY

CHICAGO
The University Press of Chicago
1892

*  *  *  *  *  *  *

DEPARTMENT OF POLITICAL ECONOMY.
1892-3.

OFFICERS OF INSTRUCTION:

J. LAURENCE LAUGHLIN, Ph. D., Head-Professor of Political Economy.

ADOLPH C. MILLER, A. M., Associate-Professor of Political Economy.

WILLIAM CALDWELL, A. M., Tutor in Political Economy.

*  *  *  *  *  *  *

INTRODUCTORY.

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

REMARK: In the following list the term Minor, is applied to a course which calls for four or five hours of class-room work per week for a period of six weeks. A Double Minor is a Minor running through two periods of six weeks.

 

LIST OF COURSES OF INSTRUCTION.

STARRED * COURSES ARE NOT GIVEN IN 1892-3.

  1. First Quarter: Principles of Political Economy. — Exposition of the Laws of Political Economy in its present state. — Mill’s Principles of Political Economy (Laughlin’s edition).

5 hrs. a week, Double Minor.
Associate Professor A. C. Miller.

Second Quarter:

Either, 1A. Advanced Political Economy. — Cairnes’s Leading Principles of Political Economy. — Marshall’s Principles of Economics (vol. I.).

5 hrs. a week, Double Minor.
Mr. Caldwell.

Or, 1B. Descriptive Political Economy. — Lectures and Reading on Money, Banking, Cooperation, Socialism, Taxation, and Finance. — Hadley’s Railroad Transportation. — Laughlin’s Bimetallism.

4 hrs a week, Double Minor.
Associate Professor A. C. Miller.

  1. Industrial and Economic History. — Leading Events in the Economic History of Europe and America since the middle of the Eighteenth Century. — Lectures and Reading.

4 hrs. a week, 2 Double Minors.
Mr. Caldwell.

  1. Scope and Method of Political Economy. — Origin and Development of the Historical School. — History of Political Economy in Germany. — Lectures and Reports.

4 hrs. a week, Double Minor.
Mr. Caldwell.

  1. Unsettled Problems of Economic Theory. — Questions of Exchange and Distribution.— Critical Examination of selections from leading writers.

4 hrs. a week, Double Minor.
Professor Laughlin.

  1. History of Political Economy. — History of the Development of Economic Thought, embracing the Mercantilists and the Physiocrats, followed by a critical study of Adam Smith and his English and Continental Successors. — Lectures and Reading. — Reports.

5 hrs. a week, Double Minor.
Mr. Caldwell.

  1. Recent German Systematic Writers*. — Wagner, Cohn, Schmoller, Schäffle, and Menger. — Exposition, critical comments, and reading of authors. — Reports.

4 hrs. a week, Double Minor.
Mr. Caldwell.

  1. Socialism. — History of Socialistic Theories. — Recent Socialistic Developments. — Lectures and Reports.

4 hrs. a week, Double Minor.
Dr. Veblen.

  1. Social Economics. — Social questions examined from the economic standpoint.

A*. Social Reforms. — Future of the Working-classes. — Immigration. — State Interference. — Insurance Legislation. — Arbeitscolonien.

4 hrs. a week, Double Minor.
Mr. Caldwell.

B. Coöperation. — Profit-Sharing. — Building Associations. — Postal Savings. — Trade Unions. — Factory Legislation. — Public Charities.

4 hrs. a week, Double Minor.
Associate Professor Bemis.

  1. Practical Economics. — Training in the Theoretical and Historical Investigation of Important Questions of the Day. — Lectures and Theses.

4 hrs. a week, Double Minor.
Associate Professor A. C. Miller.

  1. Statistics. — Methods and practical training. — Organization of Bureaus. — Tabulation and Presentation of Results.

4 hrs. a week, Double Minor.
Mr. Fisher.

  1. Railway Transportation. — History and Development of Railways. — Theories of Rates. — State Ownership.

4 hrs. a week, Double Minor.
Professor Laughlin.

  1. Tariff History of the United States. — Legislation since 1789. — Economic Effects. — Reading.

4 hrs. a week, Double Minor.
Professor Laughlin.

  1. Financial History of the United States.— Rapid Survey of the Financial Experiences of the Colonies and the Confederation. — Detailed Study of the Course of American Legislation on Currency, Debts, and Banking since 1789. — Lectures and Reports.

4 hrs. a week, Double Minor.
Associate Professor A. C. Miller.

  1. Taxation. — Theories and Methods of Taxation. — Comparative Study of the Revenue Systems of the Principal Modern States. — Problems of State and Local Taxation in America. — Lectures and Reports.

4 hrs. a week, Double Minor.
Associate Professor A. C. Miller.

  1. Public Debts and Banking. — Comparative Study of European and American Methods of Financial Administration. — The Negotiation, Management, and Effects of Public Debts. — Examination of Banking Problems and Banking Systems. — Lectures and Reports.

4 hrs. a week, Double Minor.
Associate Professor A. C. Miller.

  1. Problems of American Agriculture*. — Comparison with European Systems of Culture. — Land Tenures. — Lectures, Reading, Reports.

4 hrs. a week, Double Minor.
Professor Laughlin.

  1. Seminary. — Intended only for mature students capable of carrying on independent researches.

4 hrs. a week, 3 Double Minors

 

 

DESCRIPTION OF COURSES
GENERAL.

The courses may be roughly classified into —

Group I., Elementary. — Courses 1, 1A, 1B, and 2;
Group II., Theoretical. — Courses 3, 4, 5, 6, and 7;
Group III., Practical. — Courses 8, 9, 10, 11, 12, 13, 14, 15, and 16.

Students are advised to begin the study of economics not later than the first year of their entrance into the University College; and students of high standing, showing special aptitude for economic study, may properly take Course 1 in the last year of the Academic College.

For admission into the courses of Groups II. and III., a prerequisite is the satisfactory completion of Course 1 (with either 1A or 1B), or its equivalent. Those desiring only a general acquaintance with the subject are expected to take Course 1B during the second quarter; but those who intend to make a serious study of economics are advised to take 1A during the second quarter.

After passing satisfactorily in Course 1 (with either 1A or 1B), the student will find a division of the courses into two general groups: Group II. will be concerned chiefly with a study of economic principles, their historical development, and the various systems of economic thought; Group III., while making use of principles and economic reasoning, will be devoted mainly to the collection of facts, the weighing of evidence, and an examination of questions bearing on the immediate welfare of our people. For a proper grasp of the subject, Courses 3, 4, and 5 are indispensable; and in the second year of his study of economics the student should supplement a course in Group I. by a course in Group II.

Ability to treat economic questions properly can be acquired only if the student, being possessed of some natural aptitude for the study, devotes sufficient time to it to enable him to assimilate the principles into his thinking, and to obtain certain habits of mind, which are demanded for proficiency in this, as in any other important branch of study. Tests of proficiency will be exacted at the end of each period, six weeks.

 

 

SPECIAL.

COURSE 1.

First Quarter: Principles of Political Economy. —Exposition of the Laws of Political Economy in its Present State. — Mill’s Principles of Political Economy (Laughlin’s edition).

5 hrs. a week, Double Minor.

Second Quarter:

Either, 1 A. Advanced Political Economy.— Cairnes’s Leading Principles of Political Economy. — Marshall’s Principles of Economics (vol. I).

5 hrs. a week, Double Minor.

Or, 1B. Descriptive Political Economy. — Lectures and Reading on Money, Banking, Cooperation, Socialism, Taxation, and Finance. — Hadley’s Railroad Transportation. — Laughlin’s Bimetallism.

4 hrs. a week, Double Minor

All students beginning the study of Political Economy will take Course 1. At the second quarter the class will divide. Those desirous of laying the foundation for work in the advanced courses will take 1A; those who, while giving their attention mainly to other departments, seek simply that general knowledge of economics demanded by a liberal education, and cannot devote more time to the study, will take Course 1B. Course 1 is designed to give the student an acquaintance with the working principles of Political Economy.

Course 1A will continue the theoretical training in the principles of Political Economy. The discussions will be based on Cairnes’s Leading Principles of Political Economy, and Marshall’s Principles of Economics (vol. I). Only those students who have passed satisfactorily in Course 1A, will be admitted to Courses 3, 4, 5, 6, 7 and 9.

Course 1B is mainly descriptive and practical; in it will be considered the various practical questions illustrating the application of economic principles, the lectures and reading supplying the student with the knowledge necessary for the more intelligent discharge of the duties of citizenship. The subjects discussed will be: Money, banking, coöperation, socialism, taxation, finance, and railway transportation. Students will be expected to read Hadley’s Railroad Transportation, and Laughlin’s History of Bimetallism in the United States.

COURSE 2.

Industrial and Economic History. — Leading Events in the Economic History of Europe and America since the middle of the Eighteenth Century. Lectures and Reading.

4 hrs. a week, 2 Double Minors.

This course endeavors to present a comprehensive survey of the industrial, commercial, and economic development of the western world since the middle of the last century. After a preliminary study of the industrial revolution and the rise of the factory system, attention will be called to the economic and social effects of the American and French revolutions; to the development of American commerce; to the introduction of steam transportation; to the adoption of free trade by England; to the new gold discoveries and their wide-spread effects; to the civil war in the United States; to the French indemnity; to the crisis of 1873; and to the economic disturbances of the past twenty years. The course is conducted mainly by lectures, but a course of collateral reading will be prescribed upon which students will be expected to report from time to time.

No previous economic study is required of students entering this course, but it will be taken to best advantage by those who already have some knowledge of economic principles, or who are taking this course in connection with Course 1.

COURSE 3.

Scope and Method of Political Economy. — Origin and Development of the Historical School. — History of Political Economy in Germany. Lectures and Reports.

4 hrs. a week, Double Minor.

This course attempts to define the province, postulates and character of Political Economy; to determine its method, and to examine the nature of economic truth. The methods of proof and the processes of reasoning involved in the analysis of economic phenomena and the investigation of economic problems, and the position of Political Economy in the circle of the Moral Sciences — its relation to Ethics, Political Science, and Sociology — will be studied. In view of the controversies which have arisen on these fundamental topics, a critical estimate will be made of the views of leading writers on Methodology, such as Mill, Cairnes, Menger, Wagner and Schmoller.

The origin and development of the modern historical school will be described, special attention being devoted to Knies, Die Politische Oekonomie vom Geschichtlichen Standpunkte.

In connection with this work, the course of German economic thinking will be traced from the earlier writers, Rau, von Thünen, and Hermann; after which the influence of the English writers, the later formation of various groups, with their distinguishing tenets, and the German point of view, will be presented. The statements of the writers themselves, rather than opinions about them, will be studied.

Students will be required to prepare critical studies on books, or subjects, selected by the instructor. Course 3 is preliminary to Course 6.

COURSE 4 .

Unsettled Problems of Economic Theory. — Questions of Exchange and Distribution. Critical examination of selections from leading writers.

4 hrs. a week, Double Minor.

Little use will be made of text-books, or lectures, in this course, it being intended to take up certain topics in economic theory and to follow out their treatment by various writers. The more abstruse questions of exchange and distribution will be considered. No student, therefore, can undertake the work of this course with profit who has not already become familiar with the fundamental principles. The course is open only to those who have passed satisfactorily in Course 1A., or who can clearly show that they have had an equivalent training.

The subjects to be considered in 1892-3 will be as follows: The theories of final utility and cost of production as regulators of value, the wages-fund and other theories of wages, the interest problem, manager’s profits, and allied topics. The discussion will be based upon selected passages of important writers. The study of wages, for example, will include reading from Adam Smith’s Wealth of Nations, Ricardo’s Works, and the writings of J. S. Mill, Longe, Thornton, Cairnes, F. A. Walker, Marshall, George and Böhm-Bawerk. Students will also be expected to discuss recent important contributions to these subjects in current books or journals; and they will be practised in the exposition of special points before their fellow students.

COURSE 5 .

History of Political Economy. History of the Development of Economic Thought, embracing the Mercantilists and the Physiocrats, followed by a critical study of Adam Smith and his English and Continental Successors. Lectures, Reading, and Reports.

5 hrs. a week, Double Minor.

This course treats of the history of economic theory, not of the history of economic institutions; of the origin and development of our existing knowledge of economic principles, not of the phenomena of wealth with which these economic principles are concerned. Since it investigates the evolution of economic thinking as expressed in a growing collection of principles, the student will have little occasion to study writers previous to the XVI century. The time will be given to the economic theories and commercial policy of the Mercantile system; to the Physiocratic school; to Adam Smith and his immediate precursors; to the English writers from Adam Smith to the present day; and to a brief review of French, Italian, and American writers. From the multiplicity of writers, selections will be made of those who have had great influence, or who have made marked contributions to political economy. The whole study will aim to present the continuity of development of economic doctrine from its origin to the present time.

The work, however, is not intended merely as a means of information. It is expected that the student himself should in every case read portions of the great authors bearing on cardinal principles, and, by critical comment and comparison, it is hoped he may gain much in discipline and in judicial insight. It is believed that a more fresh, original, and just understanding of the history of political economy can be obtained by this mode of treatment than by taking a knowledge of the authors at second-hand. The work of this course, therefore, must largely be carried on in the Economic Library. In this, as in other courses, the instructor will pay early attention to bibliography and to the best methods of using books.

COURSE 6.

Recent German Systematic Writers. Wagner, Cohn, Schmoller, Schäffle, and Menger. Exposition, critical comments, and reading of authors. Reports.

4 hrs. a week, Double Minor.

It is the object of this course to present the point of view of the leading recent German writers in Economics, through a study of the character and contents of their systematic treatises. In this way it is hoped that the desire for a direct acquaintance with the particular economic doctrines which are actually taught in Germany at the present day can be adequately met. The student will be helped to appreciate the spirit, quality, and tendency of German economic thinking, and thus be enabled to broaden his view of fundamental economic ideas.

The instructor will outline the system of each writer, give the substance of less important portions, and, with comments, translate in the class-room considerable selections. The student will be expected to have a working knowledge of German, and will be required to read parts of the authors not read in the class-room, upon which reports and critical studies in writing must be made. An incidental aim of this course will be to assist the student in acquiring a rapid reading knowledge of economic German.

The authors to be used are as follows:

Wagner, Volkswirthschaftslehre. Grundlegung.
Schmoller, Ueber einige Grundfragen des Rechts und der Volkswirthschaft.
Schäffle, Bau und Leben des socialen Körpers (ed. 1881).
Cohn, System der Nationaloekonomie. Grundlegung.
Menger, Grundsätze der Volkswirthschaftslehre,

COURSE 7.

Socialism. History of Socialistic Theories. Recent Socialistic Developments. Lectures and Reports.

4 hrs. a week, Double Minor.

The origin of the present socialistic movements, whether popular or scientific, will be traced to their beginnings previous to the middle of the present century; the events ending in 1848 will be described; and an examination will be made of the writings of Rodbertus, Marx, Lassalle, Karl Marlo, and William Thompson, from the economic standpoint. The criticisms offered, among other writers, by Leroy-Beaulieu, Rae, H. Spencer, and Schäffle, will be brought under review. A study of the “International” will be followed by an account of the spread of Socialism to England and America. The position and tenets of the Fabian Society in England; the popular agitations of the present day in Europe and America; the socialistic tendencies imputed to George’s Progress and Poverty, Gronlund’s Coöperative Commomwealth, and Bellamy’s schemes for Nationalism, will be taken up. Practical work will be done with the programs and platforms of socialistic, labor, and trade organizations.

Attention will then be given to the alleged socialistic trend of development, to State Socialism, to the economic factors in operation, and to the ethical aspect of the economic questions involved.

Students will be expected to make written reports and critical studies from time to time, in addition to selected reading. Those who have not examined questions of value and distribution carefully will be at a disadvantage in this course.

COURSE 8.

Social Economics. Social questions examined from the economic standpoint.

Course 8 includes two separate courses, known as Course 8A, and Course 8B. Under these heads many subjects into whose treatment ethical and social considerations enter, but which have a distinct economic character, will be considered.

COURSE 8A. Economic Reforms — Future of the Working-classes. Immigration. — State Interference. — Insurance Legislation. — Arbeitscolonien.

4 hrs. a week, Double Minor.

Under this head the ethical, sociological and political principles underlying proposed practical reforms and methods of social improvement will be noticed and criticised, and their economic values and effects will be considered and estimated. It will be sought to determine, as far as possible, the teaching of history and experience on these matters, and also the conditions and range, the merits and defects of various experiments.

COURSE 8B. Coöperation. — Profit-Sharing. — Building Associations. — Postal Savings. — Trades Unions. — Factory Legislation. — Public Charities

4 hrs. a week, Double Minor.

In this course schemes of economic reform will be studied and presented with a view to inform the student how they may be carried out into actual practice. It is hoped that members of this course, under the guidance of the instructor, may be familiarized with the process of organizing desirable movements of a philanthropic character in various parts of the community.

Both of these courses may well be elected by candidates for the ministry, who have already passed in Course 1. Reading and reports will accompany the lectures.

COURSE 9.

Practical Economics.Training in the Theoretical and Historical Investigation of Important Questions of the Day. Lectures and Theses.

4 hrs. a week, Double Minor.

Preliminary training for investigation is combined in this course with the acquisition of desirable statistical information on practical questions of the day. The student is instructed in the bibliography of a subject, taught how to collect his data, and expected to weigh carefully the evidence on both sides of a mooted question. The short theses form a connected series, and give practice in written exposition as well as in the graphic representation of statistics. Mere compilation is objected to, and the student is urged to reach his conclusions independently and solely on the facts before him. Fresh and independent judgments are encouraged. The work of writing theses is so adjusted that it will correspond to the work of other courses counting for the same number of hours.

The instructor will criticise the theses before the class, and members of the class will be frequently called upon to lecture on the subjects of their theses and answer questions from their fellow-students.

The subjects taken up will be chosen from the following: Money, prices, bimetallism, note-issues, shipping, and commercial crises.

COURSE 10.

Statistics. Methods and practical training. Organization of Bureaus. Tabulation and Presentation of Results.

4 hrs. a week, Double Minor.

The purpose of this course is to train students in the theory and methods of statistics. Inasmuch as economic principles throw light upon the proper choice and comparison of statistical data, a knowledge of Course 1 is a prerequisite to entrance into this course. On the other hand, statistical methods are needed for the correction and furthering of our knowledge of economic principles.

Attention will be given to the vast statistical material at hand, and the student will have an introduction into the bibliography of the subject. The growth of the study; establishment of statistical offices and their organization; collection and elaboration of data; detection and elimination of errors; presentation of results in tabular form; training in graphic representation; — will form a part of the work.

Practical exercises will be required of each student in connection with the collection and presentation of statistics of mortality, insurance, production, population, wages, prices, trade, crime, etc. The great libraries of the City of Chicago will furnish exceptional advantages for this work.

COURSE 11.

Railway Transportation. History and Development of Railways. — Theories of Rates. — State Ownership.

4 hrs. a week, Double Minor.

The economic, financial, and social influences arising from the growth of modern railway transportation, especially as concerns the United States, will be discussed. The history of railway development in Europe and America; its social and economic influence; railway accounts; competition and combination; various theories of rates; railway legislation in the United States; state railway commissions; the Inter-State Commerce Act; government ownership; and a comparison with the railway systems of Great Britain, France, Germany, Austria, Italy, and Australia, — will form the essential work of the course.

Studies in writing will be exacted from each student. In addition to the lectures, the student is expected to read Hadley’s Railroad Transportation, and Acworth’s The Railways and the Traders.

COURSE 12.

Tariff History of the United States. Legislation since 1789. Economic Effects. Lectures and Reports. Reading.

4 hrs. a week, Double Minor.

Course 12 is fitly taken in connection with Course 13, which runs parallel with it. An historical study will be made of the legislation on the tariff in the United States from the beginning in 1789 to the present day. Study will be given to the provisions of each act, the causes of its passage and its economic effects. The growth of the principal industries of the country will be sketched in connection with the duties affecting them.

Students will be required to present studies on special topics connected with the course.

COURSE 13.

Financial History of the United States.— Rapid Survey of the Financial Experiences of the Colonies and the Confederation. — Detailed study of the course of American Legislation on Currency, Debts, and Banking since 1789. Lectures and Reports.

4 hrs. a week, Double Minor.

Without excluding the history of taxation, this course concerns itself chiefly with the history of our national legislation on currency, loans, and banking. The study will be based upon a careful examination at first-hand of the leading provisions of the Acts of Congress, and other materials important in our financial history. These will be reviewed from the political as well as from the financial standpoints, it being one of the objects of the course to develop the relation between finance and politics in our history. Special attention will be given to Hamilton’s system of finance and the changes introduced by Gallatin; to the financial policy of the War of 1812; to the establishment of the Second United States Bank and the struggles over its re-charter; to the crisis of 1837-9 and the establishment of the independent Treasury; to the financial problems and management of the Civil War; to the establishment of the national banking system; the refunding and reduction of the debt; and the resumption of specie payments.

COURSE 14.

Taxation. Theories and Methods of Taxation. — Comparative Study of the Revenue Systems of the principal modern States. — Problems of State and Local Taxation in America. Lectures and Reports.

4 hrs. a week, Double Minor.

This course is both theoretical and practical, and the method of presentation historical as well as systematic. A critical estimate of the theories of leading writers — such as Wagner, Cohn, Leroy-Beaulieu — will be made with a view of discovering a tenable basis of taxation. Principles are discussed; the various kinds of taxes are examined and their complementary functions in a system of taxes determined; the methods in vogue in different countries are described, special attention being given in this connection to the experiences of France. In their proper places the incidence of taxes, progressive taxation, the single tax, and the special problems of American taxation will be carefully considered. All questions will be discussed from the twofold standpoint of justice and expediency. A reading knowledge of either French or German will be expected of all students entering this course.

COURSE 15.

Public Debts and Banking. — Comparative Study of European and American Methods of Financial Administration. — The Negotiation, Management, and Effects of Public Debts. — Examination of Banking Problems and Banking Systems. Lectures and Reports.

4 hrs. a week, Double Minor.

This course treats of the organization and methods of financial administration; the formal control of public expenditures by means of the budget; the development of public debts and their economic and social effects. Consideration will be given to the various problems involved in the management of public debts, such as modes of issue, conversion, and reduction; and the methods practised in our own and other countries will be described. This course also treats of the development and history of banking; the leading systems are compared, and proposed changes in legislation examined. The relations of the banks to the public and their management in a time of crisis will receive special attention.

COURSE 16.

Problems of American Agriculture. Comparison with European systems of culture. Land Tenures. Lectures, Reading, and Reports.

4 hrs. a week, Double Minor.

Special study will be given to the extension and changes of the cultivated area in the United States; the methods of farming; the influence of railways and population, and of cheapened transportation; the fall in values of Eastern farm-lands; movements of prices of agricultural products; European markets; competition of other countries; intensive farming; diminishing returns; farm mortgages, and the comparison of American with European systems of culture. Systems of holdings in Great Britain, Belgium, France, and Germany will be touched upon, together with the discussion of forestry legislation.

Reports will be prepared by students on topics assigned.

COURSE 17.

Seminary. Intended only for mature students capable of carrying on independent researches.

4 hrs. a week, 3 Double Minors.

Under this head are placed the arrangements for Fellows, graduates, and suitably prepared persons, who wish to carry on special researches under the guidance of the instructors. Candidates for the higher degrees will find in the seminary a means of regularly obtaining criticism and suggestion. It is hoped that each member of the Seminary will steadily produce from time to time finished work suitable for publication. Emphasis will be placed on accurate and detailed work upon obscure or untouched points.

Students may carry on an independent study upon some special subject, making regular reports to the seminary; or, several students may be grouped for the study of a series of connected subjects. For this purpose, during 1892-3, the following topics are offered:

(a) American Shipping, with a retrospect to the experience of Great Britain and Holland since 1650, and a comparative study of modern European policies.

(b) A Study of Modern Currency Problems, treated theoretically and historically.

(c) A critical and historical examination of the Internal Revenue System of the United States.

 

FELLOWSHIPS.

Independently of the fellowships offered by the departments of Political Science and Social Science, at least three Fellowships, yielding an annual income of $500, will be assigned to students within the department of Political Economy for the year 1892-3. Appointments will be made only on the basis of marked ability in economic studies, and of capacity for investigation of a high character. Candidates for these fellowships should send to the President of the University a record of their previous work and distinctions, degrees and past courses of study, with copies of their written or printed work in economics. Applications for 1892-3 should be sent in not later than June 1, 1892.

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

 

PUBLICATIONS.

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

Longer investigations, translations of important books needed for American students, reprints of scarce works, and collections of materials will appear in bound volumes in a series of Economic Studies of the University of Chicago. Announcement of works already in preparation will be made at an early date.

 

LIBRARIES.

In the suite of class-rooms occupied by the department will be found the Economic Library. Its selection has been made with great care, in order to furnish not only the books needed for the work of instruction in the various courses, but especially collections of materials for the study of economic problems. It is believed that ample provision has thus been made for the work of serious research. The work of the students will necessarily be largely carried on in this Library.

Arrangements have been made with other libraries in the city for supplementing the Economic Library of the University on a large and generous scale. The combined library facilities of Chicago are exceptional. The Public Library, maintained by a large city tax; the Newberry Library, under the supervision of W. F. Poole, with a fund of several millions of dollars; and other possibilities, will enable the student to obtain any books he may need in the prosecution of detailed investigation. In the near future, it is confidently believed, the supply of reference books for students in the libraries of Chicago will be greater than anywhere else in this country; and graduate students will have exceptional opportunities for specialized research.

The officers of the department will cheerfully answer any inquiries from institutions looking for suitable teachers of Political Economy.

Inquiries and applications of students should be addressed to

THE EXAMINER,
The University of Chicago,
Chicago.

 

Source:  The University of Chicago: programme of courses in political economy, 1892-1893. Chicago, IL : University of Chicago Press, 1892.

Image Source: University of Chicago yearbook, Cap and Gown , 1900 , p. 19.

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Agricultural Economics Chicago Economists Harvard

Chicago. Economics Professor William Hill. Events leading to his leave of absence, 1894

 

 

The “peculiarly sad circumstances”, apparently a manic break in a bi-polar disorder, were reported for University of Chicago economics professor William Hill in 1894. I was able to trace much of the c.v. of this Harvard economics A.M. for today’s post. Apparently his last professional station was at Bethany College in West Virginia where his wife was able to get an appointment teaching history. I’ll keep my eyes open for more biographical information about William Hill (not an uncommon name). There were probably also episodes of depression in his life.

________________

HE GOES TO KANSAS.
PROF. HILL OF THE UNIVERSITY OF CHICAGO GIVEN A VACATION. [1894]

Peculiarly Sad Circumstances Said to Surround the Action of the Faculty in Giving Mr. Hill Chance to Rest and Recuperate – He Is Deeply Interested in Irrigation Affairs, and a Lecture Before the Political Economy Club is Stopped by Physicians.

Prof. William Hill of the University of Chicago has been granted vacation under peculiar and sad circumstances.

Mr. Hill, who is instructor in tariff history and railway transportation, lives in Graduate Hall, occupying Suite No. 16. In addition to his duties in the university, Prof. Hill has been greatly interested in a scheme for the irrigation of arid land in the western part of Kansas. He has always been noted for his studious habits, and, having perfected his plans for reclaiming the Kansas property, he has recently been trying to form a company to give them practical application. At 4 o’clock Thursday morning of last week Night Watchmen Wilson was making his last rounds through Graduate Hall. He had just put out the lights on the third floor and was just about to descend when he heard stealthy footsteps on the floor below.

“Who is there?” He called. “Hill,” was the answer.

Going down Wilson was met by Prof. Hill, who was partially undressed.

“Do you want to make some money?” He asked.

The watchmen expressed his willingness to get rich.

“I’ll show you how you can make thousands,” said the professor, leading the astonished man into his room. There he proceeded to outline his plan for irrigating the dry lands of Kansas and to talk glibly of the vast sums of money to be made in the work.

Wilson was impressed with the peculiar manner of the professor and reported it to his superior officer. The same evening in Cobb Hall Prof. Hill was scheduled to deliver an address before the Political Economy club. He kept his appointment and began his lecture, but before going far the rambling manner of his talk so alarmed his listeners that a physician was summoned, who forbade him to finish. Later the same night Pres. Harper of the university and Prof. Laughlin were driven to the rooms of Prof. Hill and had a conference over his condition. In view of the fact that Prof. Hill’s condition is not considered serious it was decided not to remove him from his rooms, his brother coming on to attend him. Wednesday Prof. Hill was granted a vacation by the faculty and started for his old home in Kansas where he will remain until he has entirely recovered his health.

One of the launchers in graduate Hall was awakened before daylight Tuesday by hearing the professor talking in a loud and disconnected way. He was laboring under the delusion, apparently, that the faculty did not properly understand his case. “The facts must be laid before the members in a proper way,” said Prof. Hill, “so that they will know all about it. I know I am ill. Of course I am ill, but if the thing is not done right who is to know it?”

“What the professor was saying,” said the one who overheard him last night, “and his manner of saying it was like that of a man in a delirium. He has been overworked and overexcited over something. Once I went into his room and found a stranger there with him. The stranger had some sort of a machine, which he was showing Prof. Hill. I understood it was something to be used for irrigating purposes. The interest the professor showed in it was intense.”

When a call was made on Prof. J. Lawrence Laughlin last night the following conversation took place:

“It is said Prof. Hill, one of the instructors in your Department of Political Economy, is ill. Will you tell me how he is?”

“The report is utterly untrue, utterly untrue; Prof. Hill is away on his vacation.”

“Is there nothing the matter with him?”

“Nothing at all; the story is utterly untrue.”

[William Hill graduated from the University of Kansas in 1891 and spent the next year at Harvard where he took his masters degree under Dr. Taussig. At Harvard he also won the Lee Memorial Fellowship. He is the author of the American Economical Association monograph on “Colonial Tariffs.” He came to Chicago University in October, 1892 and has since then become popular with both students and faculty he is Acting President of the Political Economy club of the University and his known as a bicycle rider and tennis expert.]

Source:  Chicago Daily Tribune, 15 December 1894, p.1.

________________

Chicago Years

William Hill. Associate in Political Economy, 1893-94; Instructor, 1894-97; Assistant Professor, 1897-1908; Associate Professor, 1908-12.

Source: James Laurence Laughlin, Twenty-Five Years of the Department of Political Economy, University of Chicago. Chicago: Privately printed, 1916.

________________

Harvard Years

Resident Fellow

Henry Lee Memorial Fellowship, William Hill, A.B. (Univ. of Kansas) 1890, A.B. (Harvard Univ.) 1891, a student of Political Science.

Source:Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1890-91, p. 90. and  Annual Reports of the President and Treasurer of Harvard College, 1891-92, p. 96.

Henry Lee Memorial Fellowship

For 1892-93: WILLIAM HILL, A.B. (Kansas State Univ.) 1890, A.B. (Harvard Univ.) 1891, A.M, (Ibid.) 1892. Res. Gr. Stud., 1891-93. II. year of incumbency and as a student in the School. Studied at this University. Withdrew at the close of the year, and is now Instructor in Political Economy at the University of Chicago.

Harvard University, Annual Reports of the President and Treasurer of Harvard College, 1892-93, p. 125.

Harvard Publications

William Hill, Colonial Tariffs, The Quarterly Journal of Economics, Volume 7, Issue 1, October 1892, Pages 78–100.

William Hill, “The First Stages of the Tariff Policy of the United States,”  Proceedings of the American Economic Association, 8 (1893), 452-614.

List of publications by William Hill at jstor.org.

________________

Bethany College, West Virginia

William Hill, A.B., A.M., Dean of Agriculture and Land Director.

Graduate of Friends’ Bloomingdale Academy,’ 87; Student in Earlham College [Richmond, Indiana], ’87-’88; Student in Kansas State University, ’88-’90; A.M., Harvard University, ’90-’93; Henry Lee Memorial Fellow in Harvard University, ’92-’93; Instructor in Economics in The University of Chicago, ’93-’95; Assistant Professor, ’95-’08; Associate Professor, ’08; Organizer and Director of the Agricultural Guild, ’08; Dean of Agriculture, Bethany, 1911 –

Wife:  Caroline Miles Hill, A.M., PhD., Professor of History.

A.B., Earlham College, 1887; Teacher in Friends Bloomingdale Academy, 1887-1889; A.M., Michigan State University, 1890; Fellow in History, Bryn Mawr College, 1890-1891; Ph.D., University of Michigan, 1892; Professor of History and Philosophy, Mount Holyoke College, 1892-1893; Professor of History, Wellesley College, 1893-1895; Studied in Europe, 1895-1896; Engaged in Educational and Social Work in Chicago, 1896-1910; Principal of Friends  Bloomingdale Academy, 1910-1912; Professor, Bethany, 1912 —

Source: Bethany College Bulletin, 1912 and 1913, p.8.

Source for marriage

Hill, William: s. 87-88; m. Caroline Miles, A 1887; l. add. Chicago, Ill.

Source: Who’s Who Among Earlhamites 1916, p. 82.

________________

Caroline Miles Hill, Instructor in History, ’93-’95, has recently published a valuable anthology, “The World’s Greatest Religious Poetry” [Macmillan, 1923].

Source:  The Michigan Alumnus. Vol 33 (1926-27), p. 127.

 

 

 

 

 

 

 

 

 

 

 

 

Categories
Berkeley Chicago Economists Germany Harvard New School Princeton

Harvard. Curriculum vitae submitted by Albert O. Hirschman, ca. 1942

 

One of those serendipitous finds in rummaging through a department’s correspondence in search of one thing (curricular material in my case) is the artifact transcribed for this post, a c.v. submitted to the Harvard department of economics by a 27 or 28 year old Rockefeller Foundation fellow,  O. Albert Hirschmann. It is written in a narrative, autobiographical style as was the custom in Europe of the time. Because I had the great pleasure of having worked as Albert O. Hirschman’s assistant at the Institute for Advanced Study in Princeton during the 1980-81 academic year, I photographed his early c.v. in an act of filial piety. Of course all this and more can be found in the prize-winning biography written by Jeremy Adelman: Worldly Philosopher: The Odyssey of Albert O. Hirschman. Princeton University Press, 2013. Nonetheless, the c.v. possesses the charm of being the original words chosen by Hirschman to market himself back when he was just one of dozens of European economist émigrés looking for steady work.

Thanks to Adelman’s book I learned (p. 203) that one of my Yale mentors, William Fellner, taught a general seminar on the principles of economics at Berkeley that Albert Hirschman took during his Rockefeller Foundation fellowship. Historically speaking, it’s a small world! 

__________________

O. Albert Hirschmann
1751 Highland Place
Berkeley, Calif.

CURRICULUM VITAE

I was born on April 7th, 1915, in Berlin. My nationality is Lithuanian. In 1932 I began to study law and economics at the University of Berlin. In April, 1933, I left for Paris, where I registered at the École des Hautes Études Commerciales (H.E.C.) and at the Institut de Statistiques de l’Université de Paris at the Sorbonne. In 1935 I had obtained the diplomas of both these institutions.

At the end of 1935, I went to England, in order to study for several months at the London School of Economics and Political Science under a scholarship granted to me by the International Student Service, which had already granted to me by the International Student Service, which had already helped me during my former studies. I had courses with Professors Robbins [1898-1984], T. E. Gregory [1890-1970] and B. A. Whale [Philip Barrett Whale, 1898-1950]. I worked in particular under Mr. Whale on French monetary policy since the stabilization of the Franc.

At the end of 1936, after a short stay at Paris, I applied for, and obtained a place as an assistant at the Institute of Statistics of the University of Trieste. I remained there until the middle of 1938, when I was compelled to return to Paris because of the anti-foreign and anti-semitic policy of the Fascist government. At Trieste, I worked under Professor P. Luzzatto-Fegiz [1900-1989]. I became much interested in Population Statistics and a part of my researches in this field was published in an article in the Giornale degli Economisti, January, 1938: “Nota su due recenti tavole di nuzialità della popolazione italiana.” (“A note on two recent nuptiality tables of the Italian population”.) I worked also on several problems of economic statistics and in particular on the statistics of the national income and of family budgets. At the same time I studied for my Doctor’s degree, which I obtained with the grade 120 points in a total of 120, in June, 1938. My thesis was a continuation and an expansion of the work on French monetary policy which I had begun at the London School of Economics. The thesis was to be printed in the Annals of the University, but this was rendered impossible by the subsequent political developments.

While still in Italy, during the first months of 1938, I tried to acquaint myself thoroughly with the Italian financial and economic situation. I finally sent an extensive report to Paris, which was published as a separate booklet, without naming the author, in June, 1938, by the Bulletin Quotidien de la Société d’Études et d’Informations Économiques, under the title: “Les Finances et l’Économie Italiennes – Situation actuelle et perspectives.” This report attracted some attention in Paris because by combining data from various sources I had thrown some light on the Italian economic and financial development which was surrounded by official secrecy. It was upon this report that Professor Charles Rist [1874-1955] offered me to collaborate in his Institut de Recherches Économiques et Sociales. Italy was my special field and from July, 1938, to April, 1940, I wrote regularly three-monthly reports on Italian economic development in L’Activité Économique, which was the publication of the Institute.

I also wrote a small booklet for the above named Bulletin Quotidian on the subject: “L’Industrie Textile Italienne et l’Autarcie.”

In November, 1938, Professor J. B. Condliffe [1891-1981], who was then acting as the director of studies for the International Studies Conference at Bergen, and in this capacity was organizing an international inquiry into the national systems of exchange control, entrusted me with the preparation of a report on the exchange control system of Italy. I also worked on other problems in connection with the Conference and, in particular, devised a new method of measuring the tendency toward bilateralism as completely distinct from the tendency towards equilibrium of foreign trade. Professor Condliffe encouraged me to write a small paper on this idea, and thus I presented two reports at the international Studies Conference at Bergen in 1939: (1) “Le Contrôle des Changes en Italie”—a report of ninety mimeographed pages by the International Institute of Intellectual Cooperation, which for various reasons was not signed, (2) “Étude Statistique de la Tendance du Commerce International [extérieur] Vers l’Équilibre et le Bilatéralisme”—a shorter paper also mimeographed and signed. A recent publication of the U.S. Tariff Commission on “Italian Commercial Policy (1922 – 1940)” has made an extensive use of my report on Italian Exchange Control, whereas Professor Condliffe has quoted my figures on bilateralism in his book “The Reconstruction of World Trade”.

I had registered as a volunteer for the French Army in case of war, in April, 1939. I was called as early as August, 1939. The stationary character of the war gave me the opportunity to prepare still two reports on the Italian economy, the necessary source-material being sent from Paris. After the armistice, in July, 1940, I was demobilized at Nîmes, in Southern France. From there I went to Marseilles, where I met Mr. Varian Fry [1907-1967], who had been sent to Marseilles by the Emergency Rescue Committee in order to evacuate political and intellectual refugees from France. I collaborated with him from August to December, 1940, when, upon the recommendation of Professor Condliffe, I obtained a Rockefeller fellowship, and thereupon the American visa. I arrived in this country on January 14, 1941.

After a short stay in the East, I went to the University of California at Berkeley to work in connection with a research project on Foreign Trade, directed by Professor Condliffe. Soon after my arrival at Berkeley, I met my wife and we were married in June 1941.

My original research plan was to give a statistical analysis of recent quantitative trends in world trade and my first months were spent in working out the specific problems which I intended to study. I wrote several papers on the measurement of concentration and related subjects in descriptive statistics which I hope to publish either as appendices to my main manuscript or as separate journal articles. The next step in my research was to apply the statistical methods which I had worked out to the foreign trade statistics. This required extensive calculations for which Professor Condliffe put an assistant at my disposal. I also participated in several graduate seminars and took a course in the theory of probability.

Upon the renewal of the Rockefeller fellowship for another year and after a two months illness during the winter of 1941-1942, I began to work at the theoretical and historical aspects of the problems which I had first studied from a purely quantitative point of view. The result of my research has now been embodied in a manuscript of 300 pages entitled “National Power and the Structure of Foreign Trade”, of which only the concluding section remains to be written.

Professors Howard S. Ellis [1898-1992] and Condliffe have given me the assurance that the manuscript would be published by a series edited by the newly established Bureau of Economic and Business Research of the University of California. One chapter of the manuscript giving a new statistical analysis of the composition of world trade according to commodity groups, is somewhat loosely connected with the rest and it has been suggested to me to have it published as a separate article. The Rockefeller Foundation has granted me the expenses for a trip to the Middle West and East on which I have just had the opportunity to discuss my manuscript with Professor Viner [1892-1970] at Chicago, Professors Haberler [1900-1995] and Staley [Eugene Alvah Staley (1906-1989) was at Fletcher School of Law and Diplomacy] at Harvard, Professors Staudinger [1889-1980] and Lowe [1893-1995] at the New School of Social Research and with Professor Loveday [1888-1962] and Mr. [Folke] Hilgerdt [1894-1956] of the Economic Intelligence Service of the League at Princeton.

As a result of my training, I have acquired a certain specialization in statistical methods on the one hand and in the field of international economics on the other (theory and history of international trade, international monetary problems, exchange control, foreign trade statistics, etc.) Through my work in Europe I am well acquainted, in particular, with the economic problems of Italy and France.

Having studied for prolonged periods in Germany, France and Italy, I speak and write with complete fluency the languages of these countries. I also have a reading knowledge of Spanish.

 

Source:  Harvard University Archives. Department of Economics, Correspondence & Papers 1902-1950. Box 5, Folder “H”.

Image Source: Albert O. Hirschman before he was dispatched to North Africa, circa 1943. From Michele Alacevich’s Introduction to “Albert Hirschman and the Social Sciences: A Memorial Round-Table” posted July 25, 2015.

Categories
Chicago Exam Questions Problem Sets Suggested Reading Syllabus

Chicago. Price Theory. Reading Assignments, Problems, Exam. Friedman, 1951-52

 

According to the class roll kept by Milton Friedman, we know that Gary Becker attended his graduate price theory course Economics 300A in the Autumn quarter of 1951 (presumably Becker then took 300B during the Winter quarter of 1952, but I could not find that quarter’s roll in Friedman’s papers). This post even has Friedman’s partial answer key for the True/False/Uncertain questions for Economics 300B!

The reading assignments for the two-quarter core price theory sequence taught by Milton Friedman in 1948 , and in 1958 have been posted earlier (1946 300A only).  This post gives the reading assignments with open and gated links where available (some of the papers are only available at the gated jstor.org). These can be compared to the readings for the price theory course Friedman taught at Columbia in 1939-40. 

I have put in boldface the 1951 additions to make a comparison with the 1948 version easier. Worth noting: an asterisk designates optional and not required reading.

Only one item was dropped from the 1948 reading list:

Meyers, A. L. Elements of Modern Economics, ch 5, 7, 8, 9.

The October 1951 version of the Reading Assignments for Economics 300A and B was published as an appendix to J. Daniel Hammond’s “The development of post-war Chicago price theory” in The Elgar Companion to Chicago School Economics, edited by Ross  B. Emmett, pp. 7-24. This Hammond article offers much context and is very much worth consulting.

______________________________

October, 1951

Economics 300A and B
Reading Assignments by M. Friedman

(Notes:

  1. It is assumed students are familiar with material equivalent to that contained in George Stigler,  The Theory of Price. [Revised edition, 1952] or Kenneth Boulding, Economic Analysis [Third edition, 1955].
  2. Readings marked with asterisk (*) are recommended, not required.)

Knight, F. H., The Economic Organization, esp. pp. 1-37. HB172.K73.
Keynes, J. N., The Scope and Method of Political Economy, ch. I and II, pp. 1-83. HB171.K45.
Hayek, F. A., “The Use of Knowledge in Society,” American Economic Review, Sept., 1945; Reprinted in Individualism and Economic Order. HB1.A6.

Marshall, Alfred, Principles of Economics, Bk III, ch 2, 3, 4; Bk V, ch 1,2. HB171.M36.
Friedman, Milton, “The Marshallian Demand Curve,” Journal of Political Economy, December 1949. YF6.
Schultz, Henry, The Meaning of Statistical Demand Curves, pp. 1-10. HB201.S398.
Working, E. J. “What do Statistical ‘Demand Curves’ Show?” Quarterly Journal of Economics, XLI (1927), pp. 212-27. HB1.Q3.
Knight, F. H. Risk, Uncertainty, and Profit, ch 3. HB601.K7. 1940.
*Lange, O., “On the Determinateness of the Utility Function”, Review of Economic Studies, Vol I (1933-34), pp. 218 ff. HB1.R45.
*Allen, R.G.D., “The Nature of Indifference Curves,” Ibid, pp 110 ff. HB1.R45.
Hicks, J. R., Value and Capital, Part I (pp 11-52). HB171.H64.
*Wallis, W. A., and Friedman, Milton, “The Empirical Derivation of Indifference Functions”, in Lange et al, Studies in Mathematical Economics and Econometrics. HB99.C5.
*Friedman, Milton and Savage, L. J., “The Utility Analysis of Choices Involving Risk,” Journal of Political Economy LVI (August 1948) pp. 279-304. HB1.J7.

 

Marshall, Book V, ch 3, 4, 5, 12, Appendix H. HB171.M36.
Robinson, Joan, Economics of Imperfect Competition, ch 2. HB201.R65.
Clark, J. M., The Economics of Overhead Costs, ch 9. HB195.C62.
Viner, Jacob, “Cost Curves and Supply Curves”, Zeitschrift fuer Nationaloekonomie, Bd III (Sept, 1931), pp 23-46. H5.Z55.
Friedman, Milton, “The Relationships Between Supply Curves and Cost Curves,” (dittoed) YF9.
Chamberlin, Edward, The Theory of Monopolistic Competition, ch 3, sec. 1, 4, 5, 6; ch 5. HB201.C44.
Harrod, R. F. “Doctrines of Imperfect Competition”, Quarterly Journal of Economics, May 1934, sec. 1, pp. 442-61. HB1.Q3.
Stigler, G. J., “Monopolistic Competition in Retrospect,” Lecture 2 in Five Lectures on Economic Problems. HB171.S82.
*Triffin, Robert, Monopolistic Competition and General Equilibrium Theory, esp. Part II. HD41.T8 and H31.H33, v. 67.
*Robinson, E. A. G., The Structure of Competitive Industry. H045.R732.
*___________________, Monopoly. H041.R65.
*Plant, Arnold, “The Economic Theory Concerning Patents for Inventions,” Economica, Feb, 1934. HB1.E42.
*Dennison, S. R., “The Problem of Bigness,” Cambridge Journal, Nov. 1947. Y03.

 

Marshall, Book IV, ch 1, 2, 3; Bk V, ch 6. HB171.M36.
Clark, J. B., The Distribution of Wealth, Preface, ch 1, 7, 8, 11, 12, 13, 23.
Mill, John Stuart, Principles of Political Economy, Book II, ch 14. HB171.M667.
Hicks, J. R., The Theory of Wages, ch 1-6. HD4909.H63.
Smith, Adam, The Wealth of Nations, Bk I, ch 10. HB161.S652.
Marshall, Bk VI, ch 1-5. HB171.M36.
Friedman, Milton, and Kuznets, Simon, Income from Independent Professional Practice, Preface, pp. v to x; ch 3, Sec 3, pp. 81-95, ch 4, Sect 2, pp. 118-137, App, Sec 1 & 3, pp. 142-151, 155-61. HD4965.U5F8.
Knight, F. H. “Interest” in Encyclopaedia of the Social Sciences, also in Ethics of Competition. H04965.U5F8.
Keynes, J. M. The General Theory of Employment, Interest, and Money, ch 11-14. HB171.K46.
Weston, J.F., “A Generalized Uncertainty Theory of Profit,” American Economic Review, March, 1950, pp. 40-60. HB.A6.

 

Cassell, Gustav, Fundamental Thoughts in Economics, ch. 1, 2,3. Ch. 1, 2, 3. HB 179.C283.
_________________, The Theory of Social Economy, ch 4. HB179.C283.
J. R. Hicks, “Mr. Keynes and the ‘Classics’; A Suggested Interpretation”, Econometrica, vol 5, April 1937, pp. 147-159. HB1.E23, v. 5.
Franco Modigliani, “Liquidity Preference and the Theory of Interest and Money,” Econometrica, vol 12, No. 1 (Jan 1944) esp. Part I, sec. 1 through 9, sec 11 through 17, Part II, sec 21. HB1.E23, v.12.
A. C. Pigou, “The Classical Stationary State,” Economic Journal, vol 53, December, 1943, pp. 343-51. HB1.E3, v. 53.
____________, “Economic Progress in a Stable Environment,” Economica, 1947, pp. 180-90.HB1.E42, v. 14.
Patinkin, Don, “Price Flexibility and Full Employment,” American Economic Review, XXXVIII, 4, Sept. 1948, pp. 543-64. YP6.

 

Source: Hoover Institution Archive, Milton Friedman Papers, Box 77, Folder 1 “University of Chicago, Economics 300 A & B”.

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Economics 300A
Autumn, 1951
PROBLEMS FOR READING PERIOD

  1. In an anti-trust case against the Aluminum Company of America, Judge Learned Hand argued that the Aluminum Company could be regarded as having essentially a complete monopoly on aluminum despite the existence of a highly competitive market in secondary or reclaimed aluminum (made from scrap) accounting for about one-third of the total aluminum used for fabrication. He justified this conclusion on the grounds that all secondary aluminum derives ultimately from primary aluminum produced earlier and hence that the Aluminum Company through its control of the output of primary aluminum indirectly controlled the quantity of scrap available.

            Evaluate the economic validity of this argument. To simplify your analysis assume that a single firm, say the Aluminum Company of America, has a complete monopoly of primary aluminum; that aluminum for fabrication comes from primary aluminum and secondary aluminum; and that primary and secondary aluminum are perfect substitutes. Indicate in detail how to determine the optimum price for the Aluminum Company to charge and the optimum output for it to produce if (a) the secondary aluminum is refined and sold by a large number of firms under competitive conditions; (b) it has a complete monopoly of secondary aluminum as well.

            Hand’s conclusion presumably is that the price of aluminum would be the same in cases (a) and (b). Is he correct? If not, would it be higher in case (b) than in case (a)? Lower?

 

  1. It is widely argued that entrepreneurs engaged in a number of different activities somehow have a “competitive advantage” over entrepreneurs engaged only in one even if no technical economies are achieved by combining the activities. This general argument and the supposed advantage take many different forms: sometimes it is that one activity provides a “guaranteed” market for another activity; sometimes that one activity provides financing or capital for another; sometimes that a monopoly in one line confers an advantage in another. A recent example of this reasoning is contained in a report by The Chicago Daily news financial columnist on November 20, 1951 that Sears-Roebuck had completed an arrangement with Kaiser-Frazer to market an automobile under the name of “Allstate.” The columnist commented “also there is the Allstate Insurance Company, a wholly owned subsidiary, which would benefit heavily through liability and other policies written in connection with the sales of an Allstate automobile….Some of the gossip around Detroit has been to the effect that the Allstate would have Sears batteries and tires and certain other Sears accessories as original equipment—which would mean more business for these departments of the company.”

(a) The key question is, of course, whether the financial incentive to Sears to market an automobile is greater because it owns the subsidiary companies than it would be if it did not own them. You will find it helpful in answering this question to consider first two intermediate questions: (b) Given that Sears does own the subsidiary companies and that it is going to market an automobile under its name, is it in its own interests to require that the car be equipped with accessories produced by its companies? (c) To require that cars it sells be insured by its own insurance company?

            In answering both questions (a) and (b), consider separately two cases: (1) The subsidiary companies can be regarded as operating under highly competitive conditions; (2) the subsidiary companies can be regarded as having a monopoly of the products they produce. Do the conclusions depend on the assumption made about competitive conditions? Assume throughout that there are no “technical” economies from combining the various activities.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder 76.9.

___________________

Economics 300A
Final Examination
December 17, 1951

  1. (15 points)
    (a) Appraise: “Recent studies of domestic consumption in low-cost municipalities demonstrate that the demand for electric current is highly elastic, expanding rapidly as the cost declines. The national average consumption of the United States was 604 kilowatt-hours in 1933. The average charge to consumers on October 1, 1934, for the whole country is reported as 5.4 cents per kilowatt-hour. In Seattle where the average cost is 2.58 cents, the average consumption is 1,098 kilowatt-hours. In Tacoma, the charge is 1.726 cents and the consumption 1,550. In 26 cities of Ontario, the average charge is 1.45 cents and the consumption 1,780. Finally, in Winnipeg, where the average net charge is only 8 mills per kilowatt-hour the average per capita consumption exceeds 4,000 kilowatt-hours.” (Report of the National Resources Board, December 1, 1934, Government Printing Office, 1934, p. 39.)

(b) Will a specific tax (a tax of a specified number of dollars per physical unit) on a commodity raise its price more or less than an equivalent ad valoremtax (a tax of a specified percentage of the price)? Assume that the commodity is produced and sold under competitive conditions.

  1. (15 points) (a) Figure 1 gives the locus of points of tangency between indifference curves and budget lines parallel to ab (and cd). ABCDEFGH is therefore and “expansion path” or curve showing the quantity of X and Y and individual would buy at different incomes and constant relative prices. Fill in the following table with as precise statements as are deducible from Fig. 1 by observation without measurement:

 

 

 

Segment

Income elasticity of

Good is Superior (S), Inferior (I), or Uncertain (U)

X

 Y X

Y
AB
BC
CD
DE
EF
FG
GH

(b) ABCDEF in Figure 2 is the locus of points of tangency between indifference curves and budget lines representing different money prices for X but the same money price of Y and money income (i.e. budget lines like ab and ac rotating about a). Fill in the following table with as precise statements as are deducible from Fig. 2 by observation without measurement.

Segment

 Income elasticity of Good is Superior (S), Inferior (I), or Uncertain (U)
X Y X Y
AB
BC
CD
DE
EF

 

  1. (20 points) “Monopolistic competition robs the old concept of industry (and also the Chamberlinian group) of any theoretical significance…The value of these groupings is only a concrete, empirical one…Which firms shall be included in any one group will have to be decided, not on an a prioribasis, but after an empirical survey of market realities…In the general pure theory of value, the group and the industry are useless concepts…When the study of competition is freed from the narrowing assumptions of pure competition, only two terms remain essential for the analysis: the individual firms, on the one hand; the whole collectivity of competitors on the other.” (Triffin)

(a) Explain why “monopolistic competition robs the old concept of industry…of any theoretical significance.”
(b) Explain the general position summarized in this quotation and discuss it critically.

  1. (20 points) Find the mistakes (there are at least six) in the accompanying diagram showing long and short run marginal and average cost curves, and explain the general principle corresponding to each particular mistake.

 

  1. The accompanying diagram showing a set of indifference curves between income and work is part of a diagram given by Boulding in Economic Analysis in his discussion of the effects of various types of direct taxation, and reproduced by Schwartz and Moore in the March 1951 American Economic Review. The latter write, “Given O Q2Q5 as a rate of pay, the equilibrium position is P1 where the rate of pay is equal to the MRS between leisure and income. Let us assume that we are to collect a tax from this individual equal to OL. One method of collecting the tax would be to levy a poll tax, leaving the rate of pay unaltered, as LP5. Another direct tax would be a proportional income tax represented by OSP2 which would have the effect of lowering (flattening) the rate of ‘take-home’ pay. To extract the same amount of revenue as the poll tax does, this rate of pay must be tangent to an indifference curve at an intersection with LP5. Thus P2Q2 = OL. Since the rate of ‘take-home’ pay is flatter, P2 must lie below and to the left of P5; i.e. less effort is expended and the worker enjoys a smaller net income. More important, his welfare is diminished because he must be on a lower indifference curve…Given the premises of the conventional indifference curve pattern, this must necessarily be true.”

(a):

(1) Why do the indifference curves in the diagram slope positively?
(2) How can you justify their being drawn concave upwards?
(3) The statement that OQ2Q5 is “a rate of pay” is of course wrong. OQ2Q5 is a line. Reword the statement so it is accurate.
(4) What do the authors mean by MRS?

(b) If we suppose the diagram to stand for a “representative” individual, or one of a society of identical individuals all to be taxed alike, the last sentence in the quotation is false: the authors’ welfare conclusion does not follow from their premises and arguments. Point out the fallacy in the proof.

(c) Under what conditions is the authors’ welfare conclusion valid? Can you give a proof of your statement?

 

Source:  Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder 76.9.

___________________

 

Economics 300B
Winter, 1952
PROBLEM FOR READING PERIOD

Available evidence tentatively indicates that (1) average income of white families living in the same size city is roughly the same in the North and the South; (2) the wage rate of a white worker in any given occupation is higher in the North than in the South for cities of the same size; (3) property income is roughly of equal importance for white families in the North and the South.

For purposes of this question, accept these as correct statements of fact. Can you suggest any way of reconciling the apparent contradiction among them? Presumably, any reconciliation will turn on the larger fraction of negroes and greater discrimination against them in the South than in the North.

Spell out your suggestion in detail, explaining the theoretical links if any between the higher fraction of negroes and greater discrimination, on the one hand, and the indicated results on the other. Indicate how the validity of your suggestion would be tested.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder 76.10.

___________________

ECONOMICS 300B
Final Examination
March 12, 1952

    1. (35 points) Indicate whether each of the following statements is true (T), false (F), or uncertain (U), and state briefly the reason for your answer. It is to be understood that in each question the appropriate “other things” are to be held constant.
      1. The imposition of a minimum wage for labor of type X higher than the preceding wage leads to an increase in the number of laborers of type X employed. It follows that labor of type X is hired under monopsonistic conditions. [True]
      2. Under both competition and monopoly in the product market, marginal value product of a factor to a firm is equal to marginal physical product of the firm times marginal revenue to the firm from the sale of the product. [True]
      3. Marginal productivity analysis shows that, in the absence of monopsony, a laborer gets as a wage his marginal value product. If this analysis is correct, it follows that unions can raise wages in the absence of monopsony only if they either make each worker more efficient, or increase demand for the product, or make the demand for the product more elastic. [False]
      4. The law of variable proportions (or diminishing returns) is contradicted by the fact that agricultural output of this country has increased tremendously despite a decrease in the proportion of the working population on farms. [False]
      5. The rate of interest is equal to the rate of time preference of consumers. [True]
      6. At present levels of operation, three quarters of the total cost of the XYZ railroad is overhead cost that does not vary with traffic, only one quarter is variable cost. It follows that marginal cost is much less than average cost. [False]
      7. The demand curve of an individual firm for a factor of production is identical with its marginal value productivity curve for the same factor of production. [False]
      8. The demand curve of a firm for a factor of production is a meaningless concept if the firm is a monopsonistic purchaser of that factor. [True]
      9. A declining long run supply curve is impossible in a competitive industry. [False]
      10. Marginal factor cost is equal to the price per unit of a factor whenever the product market is competitive. [False]
      11. According to the theory of joint demand, the absolute value of the elasticity of derived demand for a factor of production will be smaller the more inelastic the supply of that factor. [False]
      12. The fact that individuals do not choose occupations solely on the basis of their pecuniary attractiveness helps explain why the supply curve of labor for a particular occupation has an elasticity greater than zero. [True]
      13. If all types of services were used only in fixed proportions, a marginal-productivity theory would be neither necessary nor possible. [False]
      14. Our society is often described as a “profit” economy or “profit-maximizing” economy. The word “profit” is here used in the same sense as in the uncertainty theory of “profit.” [False]
      15. “Profit” as defined in the uncertainty theory of profit is the expected return to any factor assuming uncertainty over and above the guaranteed expected income it can obtain if it assumes no uncertainty. [False]
      16. If one income is higher than another before income tax it will also be higher after a progressive income tax, provided only that the marginal tax never exceeds 100%. It follows that if one accepts the theory that individuals act as if they sought to maximize their income, he must also accept the conclusion that such taxes do not alter individual’s actions and hence are not shifted. [False]

17 and 18. A minimum wage law is repealed. The wage rate of a class of workers hired under competitive conditions was equal to the minimum before repeal and falls after repeal. It follows that:

      1. The total wage bill for this class of labor will rise, remain constant, or fall, according as the elasticity of demand for labor of this class is greater than, equal to, or less than unity in absolute value. [True]
      2. The quantity of labor of this class employed will fall, remain constant, or rise according as the elasticity of supply of labor of this class is positive, zero, or negative. [False]
      3. The great technological improvements in the past few decades in the production of synthetic fibers (rayon, nylon, etc.) and associated decline in their relative price has, among other effects, tended to raise the price of meat in general, especially of lamb and mutton. [True]
      4. At the same time, stringent rationing of meat consumption in Great Britain, by tending to offset this effect, has improved the competitive position of the synthetic fiber industry, and so enabled it to expand more than otherwise. [True]
  2. (15 points) “The wages of every class of labour tends to be equal to the net product due to the additional labour of the marginal labourer of that class.
    “This doctrine is not a theory of wages: but is a useful part of a theory.” (Marshall)(a) What does Marshall mean by “net product”? [4] By “Marginal labourer”?[4]
    (b) Explain and evaluate the second sentence in the quotation. [7]
  3. (15 points) It is frequently argued that a tax on a product imposed at the manufacturing level involves a greater burden on consumers than a tax yielding the same revenue imposed at the retail level because the tax is “pyramided,” i.e., the “margins” of wholesalers and retailers are viewed as given percentages of purchase price and so, it is argued, price will tend to rise not only by the tax but also by the “margins” on the tax.
    Evaluate this argument.
  4. (10 points) The price of nylon thread for use in making women’s hosiery was recently lowered drastically when DuPont decided to make much larger quantities available. The resulting decline in the price of hosiery was viewed by at least some manufacturers and retailers as a misfortune and as portending smaller profits for themselves. Were they right? In the short run? In the long run? Justify your answers.
  5. (10 points) A subsidy of $X is paid per acre of land devoted to growing soy beans. Will this lead to a rise or to a decline in the yield per acre on land devoted to growing soy beans prior to the introduction of the subsidy? Justify your answer.
  6. (15 points)
    (a) What is the Pigou effect?[4] What relevance does it have to the theory of the rate of interest?[4]
    (b) List some economic decisions that would be affected by a change in the rate of interest. Indicate why they would be affected and if possible the direction of the effect. [7]

 

Source:  Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder 76.10.

Image Source: Milton Friedman (undated). University of Chicago Photographic Archive, apf1-06230, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Columbia Economists Gender

Chicago. Ph.D. Alumna, 1927. Mabel Agnes Magee. Professor at Wells College.

 

 

This post provides some biographical material for Mabel Agnes Magee who received her Ph.D. in economics from the University of Chicago in 1927. As I was browsing through Chicago departmental records, I came across her name in a form submitted to hire her as an assistant for three quarters in 1927-28 at a salary of $500. I decided to put on my detective gumshoes and see what I could find about her pre- and post-Chicago life. From at least 1930 (U.S. Census) through her retirement, she taught at the sister college to Cornell, Wells College.  Mabel Magee was born in Massachusetts, did her undergraduate studies at Simmons College, received an M.A. from Columbia University, taught briefly at Wheaton College in Massachusetts, went on Chicago for her Ph.D. in economics. So except for her graduate training at Columbia and Chicago, Mabel Magee spent her academic life entirely in women’s colleges. She is mentioned in Wade L. Thomas’ “A Brief History of the New York State Economics Association” (New York Economic Review, Fall 2011) as the host of meetings at Wells College in May 1948 that constituted the beginning of the “Central New York Economics Conference” that was the predecessor to the New York State Economics Association.

Mabel Magee retired from Wells College to DeBary, Florida, a town just north of Orlando. I have found no indication that she either married or had children. Also, up to now I have not been able to determine when she died. 

__________________

AEA Listing, 1957

MAGEE, Mabel Agnes, Box 469, DeBary, Fla. (1925) Wells Col., prof. emeritus, teach., gov. serv.; b. 1889; B.S., 1912, Simmons Col.; M.A., 1920, Columbia; Ph.D., 1927, Chicago. Fields 14abd, 8, 2b. Doc. dis. Women’s clothing industry of Chicago: study of labor relations. Pub. Trends in location of women’s clothing industry (Univ. of Chicago, 1931); “Constitutional and statutory limitations on local taxation,” 1936, 1938, 1944, “Constitutional and statutory provisions regarding local property taxation,” Tax Systems. Res. Role of federal property its local finance. Dir. Dir. of Amer. Schol.

 

Source: The American Economic Review, Vol. 47, No. 4, Handbook of the American Economic Association (Jul., 1957), p. 186.

__________________

1912 Simmons Yearbook,  Microcosm

[Portrait and signature], 698 Salem Street, South Groveland, Massachusetts. Groveland High School.

Source: Simmons College. Microcosm 1912, p. 66.

__________________

1923 Wheaton College 1923, Nike

Mabel Agnes Magee was listed as instructor in economics and history in the department of economic and sociology at Wheaton College

[Education] B.S. Simmons College; A.M. Columbia University.

[Previous Employment] Registrar’s Assistant, Simmons College; Private Secretary to president of South End National Bank, Boston; Teller at Haverhill National Bank; Private Secretary to William J. Mack, Impartial Chairman and Arbitrator Ladies’ Garment Industry, Cleveland, Ohio.

Source: Wheaton College yearbook Nike 1923  (edited by class of 1924, Wheaton College), p. 16.

__________________

Miscellaneous Facts Drawn from U.S. Census Reports

1900.  Born December 1889.

1910.  Home on Salem Street in Groveland, Massachusetts. Parents: John and Hannah Magee, born in Canada and Massachusetts, respectively. Two brothers: George and Edward L. Magee.

1920.  [same information, without brother George in household, note: last name incorrectly transcribed as “Magie”]

1930. Home on Main Street South in Ledyard, New York. Occupation “Teacher” at Wells College. Head of household: Anne C. Jones (34 yrs). Also residing there: Mariam R. Small (31 yrs), Elisabeth G. Kimball (30 yrs), and Andrew McGardon (47 yrs).

__________________

From other AEA published membership information

1928. Address given at Faculty Exchange, University of Chicago.

1938. Institutional affiliation given as Wells College.

1948. Institutional affiliation given as Wells College.

1966. No longer included in AEA membership directory.

__________________

 Foreign travel

1952. Arrived in New York City from Amsterdam on a KLM flight on August 25.

1961. Arrived in New York City from Paris on Lufthansa 806. U.S. address given as 12 Estiella [sic, Estrella] Road, Debory [sic, DeBary], Florida.

Source:  From ancestry.org’s immigration and emigration data base.

__________________

 

Image Source:  Senior portrait of Mabel Agnes Magee in the Simmons College Yearbook, Microcosm 1912, p. 66.

Categories
Chicago Curriculum Iowa Statistics

Chicago. Henry Simons argues for an undergraduate sequence of mathematics/statistics for economists, 1937

 

 

The letter below written by Henry Simons to Henry Schultz in 1937 is evidently a typed copy of what was originally a letter on official University of Chicago stationary. The typed header matches the printed header of University of Chicago stationary and there is no signature at the end.

Simons appears to be seeking Schultz’s support for the introduction of a “Mathematics for Economists” course into the undergraduate economics curriculum as well as for providing different courses for students who intend to go on to more advanced economics training versus the sort of survey courses that would constitute the entirety of the life-time economics education of non-econ-majors. An interesting aside: Simons problematized the lack of analytical preparation displayed by the students coming from Social Services Administration that he saw reducing the standards in the economics courses that they were required by their program to attend.

_____________________________

The University of Chicago
The Department of Economics

Memorandum to Members of the Department from Henry Schultz. July 8, 1937

The attached letter from Mr. Henry C. Simons might very well serve as a basis of discussion. It may be necessary to call a meeting to discuss this question before the quarter is over.

*  * *  *  *  *

THE UNIVERSITY OF CHICAGO
Department of Economics

June 4, 1937

Dear Mr. Schultz:

Out at Ames last week I heard about some plans of their economics department which made me very envious. They are getting ready to offer next year a sequence of three courses combining elementary mathematics and statistics; and they expect afterwards to make these courses prerequisites to their advanced (divisional) courses in economics. Moreover, they seem to be facing squarely the task (1) of providing a significant amount of training in the calculus, (2) of eliminating or cutting down those parts of the usual freshman mathematics which are of little use for their students, and (3) of mixing in with the formal mathematics perhaps as much statistics as is covered in a one-Quarter course.

If they carry out these plans, their students will soon be better prepared for substantial economics training than are even those few students here who complete Math. 104, 105, and 106—not to mention those who meet only our minimum requirement of one course in college mathematics. Meantime, nothing is being done to improve our situation here. Mrs. Logdon’s courses were a slight improvement over the old elementary mathematics; but they represent only a small beginning toward what might be done. The 104 course has its merits; but the two following courses, I gather, largely compensate for any departures from tradition which the first course involves. We still have not faced the fact that the traditional freshman mathematics, however suitable for students who will specialize in mathematics or physics, is very ill-suited to the needs of students going into other divisions or of those concluding their formal education at the college level.

I feel that we should face now the responsibility of providing a suitable minimum of training in mathematics, formal and applied, for all students in the College. Nothing can more easily be defended as a part of general education or as intellectual preparation for serious work in the Divisions. The need here might well be met by a three-course sequence of the kind which they are planning at Ames—although I am not competent to prescribe, or disposed to quarrel, about details. There are obvious advantages in mixing a certain amount of applied mathematics with the more formal training; and the fundamentals of statistics can be taught to best advantage only as mathematics and in the atmosphere of mathematics courses. As regards these fundamentals, there is no need for differentiation of courses according to divisions or departments—except possibly in the case of the physical sciences. With appropriate work in the College, divisional statistics courses in the various departments might then achieve their proper emphasis upon special applications in the special fields.

Our own Division probably could not now be induced to impose such a requirement for admission. Some departments would doubtless oppose it vigorously. This situation, however, does not argue against developing in the College the sequence of courses which would be most useful. If the proper courses were available, we could make them prerequisite for divisional work in economics; and, at the least, we could urge the advisers in the College to explain that students coming to us without such preparation would be somewhat handicapped on that account. Some other departments and divisions might go along with us. The Division of Biology certainly should do so; the School of Business and the Law School would probably cooperate eventually; and the School of Social Services Administration needs this sort of thing badly, both to protect their own standards and to guard us against the demoralization of standards which a large influx of their ill-prepared students can produce in the economics courses which they require.

It remains to point out that an important step could be taken now by our own department. Our announcements indicate that “Social Science II or equivalent” is prerequisite for divisional courses in economics. The policy here involved is, I believe, grossly mistaken. Instead of requiring this sequence, we should recommend against it in the case of students preparing for divisional work with us, or, at least, indicate clearly that the existing mathematics sequence is distinctly preferable as preparation. The typical student now gets a survey of social science in the first year, another in the second year, and still another (the five 201 courses) in the first two quarters of the third year. This represents an outrageous squandering of the student’s time, considering the alternatives actually sacrificed. Social Science II has perhaps a proper function; but it is not that of preparing students for divisional work. It may be appropriate to offer such a sequence for students who will enter other divisions and who will have no further work in social science fields. Our own students, however, should be getting more fundamental education—should be taking courses involving the more rigorous intellectual discipline in which their subsequent training will be somewhat  deficient.

If there be disagreement on some of these suggestions, there should be little opposition to my minimum proposal, namely, that Math. 106 be indicated in our announcements as a prerequisite alternative to Social Science II. Frankly, this is what it is in fact now, when I am acting as departmental counselor.

In passing, I will mention another suggestion which I have urged repeatedly in meetings and in memoranda. Something should be done to stop this concentrating of the 201 courses in the first two quarters of the student’s divisional work. These courses should not constitute merely another hurdle which students must get over before they are permitted to concentrate upon departmental courses. They should be spread throughout the last two years, as a continuing correction against narrow departmental specialization in outlook and interest—not studied hastily in a lump and forgotten.

The advisers in the College have finally discovered that Math. 104 is useful for students going into economics. They should all be told now to recommend105 and 106 as well and to suggest that good and serious students should be prepared to take at least some calculus after they leave the College (if not before). It is surprising how many of our seniors now complain bitterly because their College advisers failed to offer such suggestions.

I trust that some of these suggestions will seem to merit discussion.

Sincerely,

Henry C. Simons

 

Source: The University of Chicago Archives. Department of Economics. Records. Box 41, Folder 12.

Image Source: Henry Calvert Simons portrait at the University of Chicago Photographic Archive, apf1-07613, Special Collections Research Center, University of Chicago Library.
Henry Schultz from “[Photograph]: Henry Schultz 1893-1938.” Econometrica 7, no. 2 (1939).

Categories
Chicago Exam Questions Fields

Chicago. Money and banking prelim exam questions, 1969

 

In Milton Friedman’s papers at the Hoover Institution Archives are filed copies of three preliminary exams for graduate students in economics from the Winter Quarter of 1969. Recent posts featured the transcriptions of the price theory prelim and the macroeconomics prelim ( or “income, employment and price level” as was the Chicago wont to say). This post takes a walk on the monetary side, namely, with the prelim for the field of money and banking. This exam was followed in the archival folder by a handwritten table by Friedman with the points awarded for the seventeen candidates who took the exam. Out of a maximum score of 240 possible points, the top exam received 189 points.  Failing grades were for 118 points and below (four examinees). The exams have Friedman’s mostly illegible notes written on them, presumably indications of the correct answers. Perhaps some day there will be a brave soul with greater patience than I possess who will try transcribing these academic scribblings of a few years back. 

The reading list for Milton Friedman’s money course from the Winter Quarter 1970 has been posted earlier.

_________________

MONEY AND BANKING
Preliminary Examination for the Ph.D. and the A.M. Degree
Winter Quarter, 1969

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: 4 hours

  1. [40] The Federal Reserve has recently altered the method of calculating required and actual reserves. Required reserves are now calculated on the basis of average deposits two weeks earlier. Actual reserves equal average cash in vault two weeks earlier plus deposits at Federal Reserve Banks the current week. (There are a few other minor technical details that can be neglected.)
    Under this new system, the adjustment mechanism of the banking system is in principle dynamically unstable (explosive) for any one week by itself.

(a) Explain why the system is dynamically unstable.
(b) What factors render the system stable in practice?
How does the new system affect:
(c) The Federal Reserve’s ability to control the money supply;
(d) The significance of excess reserves, free reserves, and borrowings.

  1. [25] “Central bankers were highly receptive to the Keynesian analysis of monetary policy because it fitted in with their own preconceptions, which were based on the real-bills doctrine.” Explain why you agree or disagree, in the process summarizing the history of the real-bills doctrine.
  1. [25] A major relationship in most income-determination models is the negative interest elasticity of investment. But during the post war period in the U.S., falling interest rates have been accompanied by declining rates of investment in plant and equipment and a rising volume of residential construction.

(a) Does that suggest that residential construction is more interest-elastic than investment in plant and equipment?
(b) How far, if at all, has the observed pattern been related to central bank policy and the structure of financial intermediaries?

  1. [40 ]

(a) Construct a model for the analysis of economic policy in a closed economy, with an exogenous money supply, an income-elastic tax system, flexible prices, and saving a constant fraction of income.
(b) For a unique equilibrium, which variables do you regard as determined by this model, and which outside the model?
(c) Distinguish between monetary and fiscal policy in terms of your model.
(d) Can monetary policy be used to maintain stable prices? Can fiscal policy? Indicate the conditions in the model necessary for only one or the other to be effective.

  1. [40] Consider the problem of explaining the response in a stationary economy to a change that leads to increased unemployment of resources, such as an unanticipated fall in the demand for goods and services. Suppose that any increases in unemployment are temporary, with dynamic properties of the system such that there will be a return to an “equilibrium” or “natural” rate of unemployment if no further unanticipated shocks occur.

(a) Explain what the “natural rate of unemployment” means.
(b) Assume that the quantity of money is constant. Sketch out an explanation of the time path of output, employment of labor, price of goods, price of labor, and interest rate.
(c) Indicate what each of the following concepts means and how, if at all, each is relevant in explaining the adjustments: search unemployment, labor as a quasi-fixed factor of production, Phillips curve, expectations.

  1. [40] The loss in real value of money during inflation has been likened to a tax. Assume that inflation is fully anticipated. How much is the tax, who bears it, and who receives the proceeds:

(a) If there are 100 percent reserves and the central bank pays no interest on reserves, with commercial banks otherwise regulated?
(b) Same as (a) except there is fractional reserve banking?
(c) If there is fractional reserve banking and the central bank pays no interest on reserves, with commercial banks forbidden to pay a nominal rate of interest deposits higher than would be paid in the absence of inflation?
(d) Same as (c) except banks are also forbidden to charge nominal interest rates on loans higher than would prevail in the absence of inflation?
(e) If there is fractional reserve banking, no interest rate regulation on commercial banks, and the central bank pays interest on reserves totaling to the interest payments earned on its assets?

  1. [30] Assume that the U.S. stops pegging the price of gold and of other currencies, and in reaction to this measure[?], the European common market countries form a currency bloc linked internally by fixed exchange rates and permit the exchange rates of the common market currencies to float relative to the dollar. Assume that all other currencies float relative to the dollar.
    Compare monetary adjustment within the two currency areas (i.e. adjustment of the fifty states of the U.S. as compared to adjustment of the six countries of the common market).

 

Source: Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source:  Milton Friedman (undated) from University of Chicago Photographic Archive, apf1-06231, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Exam Questions

Chicago. Graduate economics prelim. Theory of income, employment and price level, 1969

 

The price theory prelim for 1969 at Chicago was transcribed for the previous post. Today’s post gives us the 1969 prelim examination questions for core macroeconomics (in Chicago speak of the day: “Theory of Income, Employment and Price Level”).

The M.I.T. general macroeconomic exams for 1959-1971 were transcribed and collected into a single post.

The copy of the exam in Milton Friedman’s papers at the Hoover Institution includes (Warning: Plot-spoiler!) the answers to the True-False-Uncertain questions:    1=F; 2=F; 3=T; 5=T; 5=F; 6=T; 7=T.

_____________

CORE EXAMINATION
Theory of Income, Employment and Price Level
Winter, 1969

Preliminary Examination for the Ph.D.

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

 

I.

  1. [20] Indicate whether each of the following statements is True (T), False (F), or Uncertain (U), and state briefly your reasons:

____1. If the capital stock is growing, then the marginal efficiency of investment is greater than the marginal product of capital.

____2. In an economy growing at a rate of 4 percent per year in which the income elasticity of demand for money is 2.0, a budget deficit of up to 8 percent of government expenditures can be financed by money creation without producing inflation.

____3. In a simple income determination model, the elasticity of income with respect to changes in the marginal propensity to consume is mpc/(1-mpc).

____4. The instability of the growth equilibrium in Harrod-Domar models can validly be attributed to the particular assumptions made about the production function.

____5. A decline in prices raises real balances for a fixed quantity of money. This is known as the real balance effect.

____6. A real balance effect is compatible with a liquidity trap.

____7. A decrease in rental rates on cars which led to no change in the total number of cars in operation would raise recorded national income.

  1. [20] Fill in the missing numbers and briefly describe how you obtained them. Neglect any effects of the corporation or personal income taxes. Assume all rates are on an annual basis.
Annual interest rate on government consols = 6.5 percent
Annual dividends as a percent of earnings = 25 percent
Dividend yield of common stock = 3 percent
Rate of return on real estate = 5 percent
Annual percentage rate of change of a price index of goods and services =  ______
Percentage rate of change in the price per share of common stock =   ______
  1. [40] Assume that in a closed economy [with flexible prices] tax revenue is proportionate to income, that the government fixes the level of its spending, and that the government finances all budget deficits by money creation. Analyze the consequences of this policy for [What is] the equilibrium level or rate of change of nominal income and show the effect of an increase in the level of government spending from an initial position of equilibrium[?] Discuss separately two cases: (a) the government fixes the nominal level of its spending; (b) the government fixes the real level of its spending.
  2. [30] “It is of no manner of consequence with regard to the domestic happiness of a state whether money be in a greater or less quantity. The good policy of the magistrate consists only in keeping it, if possible, still increasing” (David Hume, 1742). What is the verdict of two centuries of further writing on money on this proposition?
  3. [30] “Many commentators have written as if commercial banks were losing deposits to their non-banking competitors. A closer look, however, shows that this notion is misleading.
    “If a commercial bank depositor writes a check in favor of his mutual savings bank, the savings bank will either re-deposit the check in its own commercial bank account or extend mortgage credit to an individual. The individual, in turn, will either deposit the check in his bank account or turn it over to the seller of the house he is buying. And the seller will either put the check in his bank account or turn it over to his creditors who will put it in theirs….
    “The crucial point is that commercial banks compete for deposits only with other commercial banks. They cannot lose deposits to other financial institutions or financial instruments.”
    Discuss.
  4. [30] Consider the following neo-Keynesian system in which Ctis real consumption, Itis real investment, Ytis real income and Xtis real autonomous expenditures.

{{C}_{t}}-\gamma {{C}_{t-1}}=k\left( 1-\nu \right){{Y}_{t}}
{{I}_{t}}-\delta {{I}_{t-1}}=m\left( 1-\delta \right){{Y}_{t}}+{{X}_{t}}-\delta {{X}_{t-1}}
{{Y}_{t}}={{C}_{t}}+{{I}_{t}}

What are the necessary conditions for stability? If these are satisfied, can the model generate cycles?

  1. [30] Panama has no central bank but uses U. S. currency (plus some coin of its own), relabeling a dollar as a Balboa.
    Netherlands has a central bank, which issues a national currency denominated in guilders.
    The U. S. has a central bank which issues a national currency denominated in dollars.
    The U.S. and Netherlands have fixed exchange rates with other major currencies. Assume that none of the countries has any extensive exchange control.
    The monetary authorities of all three countries proclaim that they cannot control the quantity of money.
    Discuss.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source: David Hume’s toe in Edinburgh.

Categories
Chicago Exam Questions

Chicago. Graduate prelim exam questions for price theory, 1969

 

For comparison’s sake, here are the questions for the price theory prelim exam at the University of Chicago in 1964.

_________________

PRICE THEORY
Preliminary Examination for the Ph.D. and the A. M. Degree
Winter Quarter, 1969

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

I.

  1. A recent survey found that supermarkets in low income areas charge higher average prices than supermarkets in high income areas for many identical items. This is consistent with

_____(a) price discrimination in the sale of groceries

_____(b) no price discrimination

_____(c) lack of competition in the retail grocery market

_____(d) competition in the retail grocery market.

Check those that apply.

 

On the following questions, indicate whether True (T), False (F), or Uncertain (U), with brief explanation.

  1. A firm produces output xusing inputs a1 and a2, which it purchases competitively at prices p1 and p2. Its total cost is given by

C=A{{x}^{\gamma }}p_{1}^{{{a}_{1}}}p_{2}^{{{a}_{2}}}

where A, ?, a1, a2 are constants.

_____(a) The demand for the first factor is given by

{{a}_{1}}=\frac{\partial C}{\partial {{p}_{1}}}=\frac{{{\alpha }_{1}}C}{{{p}_{1}}}

_____(b) The production process of the firm exhibits constant returns to scale.

_____(c) The above cost function corresponds to a Cobb-Douglas production function.

 

  1. Consider a price system involving four commodities, q1, q2, q3, and q4. If the goods are gross substitutes, it can be shown that the equilibrium will

_____(a) Satisfy the Hicks conditions of perfect stability, and

_____(b) Be dynamically stable.

Assume demand shifts from the first commodity to the second commodity. Again, assuming that the commodities are gross substitutes, it can then be demonstrated that:

_____(c) P1/P2falls and P3/P4remains unchanged;

_____(d) P2/P3rises and P1/P4falls;

_____(e) P3/P1rises by a smaller proportion than P2/P1.

 

_____ 4. If the consumer’s utility function is separable, then his marginal utility must be declining for all goods.

_____ 5. In a two good world, consumer indifference curves must be everywhere convex to the origin. Otherwise there is no solution to the consumer’s problem of maximizing his satisfaction subject to his budget constraint.

_____ 6. Three top executives leave company A and join company B. The price of company A’s stock falls and the price of company B’s stock rises. This proves that the executives are being exploited.

 

II.

In Ronald Coase’s celebrated article on the nature of social cost the first example concerns the externality imposed by a cattle ranch that is next to a corn farm. The cattle can wander into the corn farm and eat some of the corn. This increases cost to the corn farmer and imposes an externality on him. Construct a formal analysis of the following situation:

(i) Let there be two firms such that the output of each firm is an “input” in the production function of the other. Let the other inputs be of the same kind, say, labor and capital. Let the output prices be given and let the input prices be given. Derive the profit maximizing solution for the two firms.

(ii) Give a precise measure of the externality and show that the solution in (i) does not depend on who pays whom.

(iii) Under what conditions will the dollar amount of the externality be proportional to the output of the other firm?

 

III.

Consider an economy with two, L and K, factors of production producing goods, X and Y, under conditions of constant returns to scale. Assume that X is relatively L-intensive at all factor prices.

(a) Analyze the effect of an increase in L on the production of X and Y on the assumption that the relative price of X and Y is constant. How would the increase in L affect the share of L in the economy’s income?

(b) Analyze the effect of an increase in the relative price of X on relative and absolute factor rewards, and on the share of L in the economy’s income. Would your answer be altered if both production functions were of Cobb-Douglas type?

(c) Analyze the effect of an increase in K on the relative price of X on the assumption that neither X nor Y is inferior in the community’s consumption.

 

IV.

What effect would you expect the British devaluation of the pound from $2.80 to $2.40 to have had on the dollar price of Rolls Royce cars? Justify your conclusion, preferably by diagrams describing the position of the company, indicating explicitly any assumptions you regard as relevant. Assume that wage rates in Britain in pounds are not affected by the devaluation.

 

V.

The difference between the price of foreign crude oil and the price of domestic crude oil (landed at the same U.S. port) times the quantity of oil consumed in the U.S. is roughly $5 billion. This has been cited as an estimate of the cost to the U.S., in terms of wasted resources, of the whole set of governmental measures special to oil (oil import quotas, percentage depletion allowances, prorationing of oil, etc.). Indicate as specifically as you can the defects, if any, in this measure, and the information needed to set a dollar value on each defect.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman, Box 77, Folder 8 “University of Chicago , Econ 331”.

Image Source: Lecture Hall 1, Social Science Research Building. University of Chicago Photographic Archive, apf2-07482, Special Collections Research Center, University of Chicago Library.

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Economics Faculty Salaries for 15 U.S. universities. Hart Memo, April 1961

 

Here we have a memo written by member of the Columbia University economics department executive committee, Albert G. Hart, that presents the results of what appears to be his informal polling of the chairpersons of 21 departments. Fifteen of the departments provided the salary ranges at four different ranks. No further details are provided, this one page memo was simply filed away in a folder marked “memoranda”. Maybe there is more to be found in Hart’s papers at Columbia University. Up to now I have only sampled Hart’s papers for teaching materials and perhaps next time, I’ll need to look into his papers dealing with departmental administrative affairs.

For a glance at salaries about a half-century earlier:  Professors and instructors’ salaries ca. 1907. 

________________

AGH [Albert Gailord Hart] 4/21/61

CONFIDENTIAL information on economic salaries, 1960-61, from chairmen of departments

Institution

 Professors Associate professors Assistant professors

Instructors
Harvard

$12,000-22,000

 $9,000-12,000 $7,500-8,700

$6,500
Princeton

$12,000-…?…

 $9,000-11,500 $7,000-8,750

$6,000-6,750
California

$11,700-21,000

 $8,940-10,344 $7,008-8,112

$5,916-6,360
MIT

$11,000-20,000

 $8,000-11,000 $6,500-9,000

$5,500-5,750
Minnesota

$11,000-18,000

 $8,500-11,000 $6,800-8,400

?
COLUMBIA

$11,000-20,000

 $8,500-10,000 $6,500-7,500

$5,500-5,750
Northwestern

$11,000-…?…

 $8,000-11,000 $6,800-7,500

?
Duke

$11,400-16,000

 $8,200-10,000 $7,200-8,200

$5,800-6,500
Illinois

$11,000-15,000

 $7,500-10,000 $6,900-8,600

$6,500-7,100
Cornell

$10,000-15,000

 $8,000-10,000 $6,500-7,500

$5,500-6,500
Indiana

$10,000-14,800

 $8,300-10,000 $6,500-7,500

?
Michigan

$10,000-…?…

 $8,700-..9,500 $6,600-8,000

$5,000
Virginia

$..9,800-15,000

 $7,800-..9,800 $6,600-7,800

?
Wisconsin

$..9,240-16,150

 $8,000-..9,000 $6,550-8,460

$5,250-5,450
Iowa State (Ames)

$..8,500-13,000

 $7,500-..8,500 $6,700-8,000

$4,700-6,600

[…]

Note: The following institutions for which data were not included in the source materials are believed to pay their economists at scales at or above the Columbia level:

Carnegie Tech
Chicago
Johns Hopkins
Stanford
Yale
UCLA

[…]

 

Source:  Columbia University Archives. Columbia University, Department of Economics Collection. Carl Shoup Materials: Box 11, Folder: “Economics—Memoranda”.