While there is an understandably greater interest in the lives of the academic celebrities of yore, Economics in the Rear-view Mirror will continue from time to time to add biographical information for the less prominent economists in the history of the academic pursuit of fame and distinction. In an important sense all but a handful of our sisters and brothers will have their names and contributions remembered two generations after their deaths anyway. The lives and careers of Ph.D. economists are varied, and our series of “Meet an Economics Ph.D. Alumnus/a” is intended to provide a sample to illustrate that variation.
In this post you will meet John Giffin Thompson, a Wisconsin Ph.D. (1907).
Note: Not to be confused with John Gilbert Thompson (1895-1940) who was a normal school (i.e. two year college to train teachers) principal who went on to work as an economist in industry.
1908. Aug 5. Married Dora Lena Robb (b. 1875, d. 1960). According to her obituary in The Times Recorder, Zanesville, Ohio of Aug. 3, 1960, she lived last 40 years in Washington D.C. Active member of the Capitol Hill Presbyterian Church there. John and Dora had no children.
1912. Thompson, John G. [Review of Principles of Rural Economics, by T. N. Carver], Journal of Political Economy, vol. 20, no. 3, 1912, pp. 289–94.
JSTOR, http://www.jstor.org/stable/1820280
1913. Thompson, John G. [Review of English Farming, Past and Present, by R. E. Prothero]. Journal of Political Economy, vol. 21, no. 5, 1913, pp. 469–74.
JSTOR, http://www.jstor.org/stable/1820027 .
1914. Thompson, John G. [Review of The Granger Movement: A Study of Agricultural Organization and Its Political, Economic, and Social Manifestations, 1870-1880, by S. J. Buck]. Journal of Political Economy, vol. 22, no. 5, 1914, pp. 495–98.
JSTOR, http://www.jstor.org/stable/1819167
1915. Thompson, John G. [Review of The Ownership, Tenure and Taxation of Land, by T. Whittaker]. Journal of Political Economy, vol. 23, no. 2, 1915, pp. 191–94.
JSTOR, http://www.jstor.org/stable/1819132
1916. Thompson, John G. “The Nature of Demand for Agricultural Products and Some Important Consequences.” Journal of Political Economy, vol. 24, no. 2, 1916, pp. 158–82.
JSTOR, http://www.jstor.org/stable/1822553
1918-21. Taught Sunday-school class to about 25 young adults (obit), many U. of Illinois staff.
From Rauchenstein’s obit for Thompson (1959).
JSTOR, http://www.jstor.org/stable/1234868
1920. U.S. Census. John G. Thompson age 46 “Investigator, Economic Research”, wife Dora R. Thompson, age 44.
1921. Thompson, John G. “Mobility of the Factors of Production as Affecting Variation in Their Proportional Relation to Each Other in Farm Organization.” Journal of Political Economy, vol. 29, no. 2, 1921, pp. 108–37. [Author identification: “John G. Thompson, Van Nuys, Cal.”]
JSTOR, http://www.jstor.org/stable/1822700
1921. “Private Research. 503 W. High, Urbana, Ill.” The University of Wisconsin. Alumni Directory, 1849-1919. P. 338.
1921. Moved with wife to Washington to continue his research at the Library of Congress according to Rauchenstein (1959).
1922. “The Cityward Movement” Journal of Farm Economics, Vol. IV No. 2 (April, 1922), pp. 65-79. [Author identification “John G. Thompson, Washington, D.C.”, Professor Carver identified in the discussion of the paper on page 79.]
JSTOR, https://doi.org/10.2307/1229697
1925. “Urbanization and Rural Depopulation in France,” Journal of Farm Economics, Vol. 7, No. 1 (Jan., 1925, pp. 145-151. [Comment on paper by Asher Hobson, “Some Economic and Social Phases of French Agriculture,” JFE (July 1924), 233-244.]
JSTOR, https://doi.org/10.2307/1230080
1927.Urbanization. Its Effects on Government and Society. New York: E. P. Dutton & Company. [Note: middle name is misspelled on the title page “Giffen” instead of “Giffin”.] https://hdl.handle.net/2027/mdp.39015014331105
1930. U.S. Census. Living in Washington DC. “Research. Social Science”.
1940. U.S. Census. Living with John’s sister Bessie in Washington DC. at 1319 E. Capitol. John “Private Research, Library”.
1950. U.S. Census. Living just with wife Dora R. at 1319 E. Capitol.
1959. Died. Obituary in Evening Star, Washington, D.C. January 3, 1959, p. 26.
Thompson, John G. of 1319 East Capitol St., on January 1, 1959, husband of Dora Roob Thompson, brother of Ralph E. Thompson of Cambridge, Ohio, and uncle of Mrs. Hiram T. Dale, Mrs. William P. Simmonds, Robert E., Dr. James M. and the Rev. David M. Thompson. Services at Chambers’ Funeral Home 517 11th St., s.e. on Saturday, January 3, at 7 p.m. Services and interment Cambridge, Ohio on Monday, January 5, at 1:30 p.m.
Image Source: University of Wisconsin-Madison Libraries Website. “View, UW-Madison, 1907” by Harley DeWitt Nichols.
When I checked to see if there was an on-line copy of this interview available, I discovered that the first portion of the interview that took place before station identification and commercial break was not included in either the audio or printed copies that I was able to find.
Economics in the Rear-view Mirror now provides for the digital record both halves of the Hayek interview.
Fun fact: the only living witness as of this posting is Washington Post columnist, George Will, who was 34 years old when the Hayek interview was broadcast.
___________________________
The existing incomplete transcript
Only the second half of the interview (after the commercial announcements) has been posted on-line up to this time.
MEET THE PRESS America’s Press Conference of the Air Volume 19, Number 25 Sunday, June 22, 1975
Produced by Lawrence E. Spivak
Guest: Dr. Friedrich A. von Hayek,
Co-recipient, 1974 Nobel Prize in Economic Science
Panel:
Hobart Rowen, The Washington Post
Eileen Shanahan, The New York Times
George F. Will, The National Review
Irving R. Levine, NBC News
Moderator: Lawrence E. Spivak
Merkle Press Inc., Printers and Periodical Publishers
Subsidiary of Pubco Corporation
Box 2111, Washington, D. C. 20013
25 cents per copy
Permission is hereby granted to news media and magazines to reproduce in whole or in part. Credit to NBC’s MEET THE PRESS will be appreciated.
___________________________
SPIVAK: Our guest today on MEET THE PRESS is the winner of the 1974 Nobel Prize for Economics, Dr. Friedrich von Hayek.
Dr. von Hayek was a Professor at the London School of Economics for 20 years and at the University of Chicago for 13 years. Most recently he has been a visiting professor at the University of Salzburg. He is the author of the international best. seller, “The Road to Serfdom.”
Dr. von Hayek is a native of Austria and a citizen of Great Britain. He is completing a three months’ visit in this country.
We will have the first questions now from Irving R. Levine of NBC News.
LEVINE: Dr. von Hayek, through your long career you have consistently warned about the dangers of government policies that contribute to inflation. Last year this country had an increase in the cost of living of over 12 per cent. This year, because of the recession, so far the cost of living has gone up about half that rate, about 6 per cent. Do you think that the danger of inflation has passed in this country?
VON HAYEK: Oh, very far from it. People will be aware that as a result of stopping inflation there is unemployment, and they still believe that they can cure inflation by unemployment, which is wrong, because in the long run it only creates more unemployment.
LEVINE: How do you cure inflation?
VON HAYEK: You stop printing money.
LEVINE: Dr. von Hayek, you have pointed out that continued inflation over a period of time would lead to anarchy and to a form of dictatorship.
Is that a theoretical danger or do you see that as some kind of a real danger in this country?
VON HAYEK: Its connection is not so simple. I have been stressing that central planning has these effects, and inflation is likely to produce central planning, but inflation by itself is not likely to have any such direct consequences, because while inflation proceeds people are much too busy just coping with the changes.
LEVINE: You have cited a stop to the printing of money as the way to end inflation. That seems simple, as stated. How could the government actually accomplish that?
VON HAYEK: Well, you give orders to the printing press. Exaggerating. We can give orders to the Federal Reserve System. The only trouble is that stopping inflation has immediately some very unpleasant effects, and the question is always whether the government is willing to incur these effects, such as the unemployment, and perhaps, the necessity of reducing some expenditures.
(Announcements)
WILL: Dr. von Hayek, in the 30 years since World War II, some nations’ economies have done very much better than others. West Germany’s, for example, has done much better than Great Britain’s. Are there any generalizations you can draw from these? What is the secret to success and the secret to problems?
VON HAYEK: It is a very complicated issue, but there is one simple point. The German trade unions were extraordinarily sensible, and they were sensible because they remembered what inflation meant. I think it has certain implications. This sense may not last long, because the generation which remembers it is now going off, and I am rather apprehensive about the future.
WILL: Dr. von Hayek, we have a basically conservative administration in the United States today, but even it is facing planned deficits more or less planned deficits exceeding perhaps $100 billion in the next two years. Do you think this will cause a renewed and perhaps socially destructive inflation?
VON HAYEK: It is not unlikely, I am afraid. As long as the governing people are persuaded that inflation of this sort is even beneficial in its effect, the tendency in that direction will be very great. I think it all depends on persuading the responsible people of the danger of inflation.
ROWEN: Dr. von Hayek, you talked in response to Mr. Levine of a painful adjustment, of the unpleasant effects that we would have to endure in order to beat inflation. With all due respect, sir, aren’t your theories somewhat unrealistic in a political sense? Do you visualize governments today being able to take such steps as you recommend?
VON HAYEK: Perhaps, I’m unrealistic. As long as people do not fully realize the danger of inflation, they may well pressure for more inflation as a short term remedy for evils, so we may well be driven into more until people have learned the lesson. What it means is that inflation will still do a great deal of harm before it will be cured.
ROWEN: To be specific, what rate of unemployment do you think this country ought to be willing to tolerate in order to beat inflation? 12 percent, 15 percent?
VON HAYEK: It is not a question of what the country is willing to tolerate. The longer you have inflation, the greater unemployment becomes inevitable. You will have to choose. It is not a matter that government can avoid the unemployment that is caused by the previous misdirection of labor which the inflation has produced
ROWEN: But when you speak of unpleasant effects, just what are you talking about that the country would have to endure? It must be some level of unemployment that you are thinking of that would result if we do cure inflation.
VON HAYEK: In a period of inflation, a lasting inflation, when, if you want to achieve a tolerably stable position, you will have to go through a period of unemployment which may well last more than a year,
ROWEN: And how high could that get?
VON HAYEK: I couldn’t say. I would have to know much more about the specific conditions, but it would not exclude a temporary rise to 13, 14 percent, or something of the sort.
ROWEN: Do you think the social fabric of this country could tolerate a 14 percent rate of unemployment?
VON HAYEK: For a few months, certainly.
SHANAHAN: Professor von Hayek, your fellow Nobel laureate, Professor Leontiev [sic], is an advocate of planning, and two of our prominent Senators, Humphrey and Javits, have introduced legislation to implement his idea, which is largely a matter of study by various government agencies and recommendations, nothing compulsory.
Do you see in that kind of planning the same dangers that you see in a more mandatory form?
VON HAYEK: If it is really nothing compulsory, it will also be completely ineffective and therefore will do no harm. I think there is a very simple answer. He really imagines that somehow people are being made to do what he is planning.
SHANAHAN: The thought I believe that they have expressed is that such things as foreseeing shortages of industrial productive capacity could be highlighted and the industries encouraged to go ahead with the building of new plants, that sort of thing. Do you encompass that in your thought that it would be completely ineffective?
VON HAYEK: Why call it planning? If you can, give industry better information, by all means do.
SHANAHAN: Can we then say you support that legislation despite your fears of planning?
VON HAYEK: It has nothing to do with planning.
SPIVAK: Dr. von Hayek, did I understand you to say in answer to Mr. Levine’s question that the way to stop inflation is to stop the printing presses? Are you suggesting that that is what we are doing here, that we are just printing money and that is the way this inflation has started and that is the way this is continuing and that is the way it will continue.
VON HAYEK: In a sense, stopping the printing presses is a figurative expression, because it is being done now by creating credit by the Federal Reserve System. By this government action all inflation is ultimately a part of activities which government determines and can control, and all inflations have been stopped in the past by the government stopping creating money or preventing central banks from creating more money.
May I add just one thing. You see, all inflations have been stopped by people who believed in a very naive form of the quantitative [sic] theory and acted on that. It may be wrong, but it is the only adequate theory effectively to stop an inflation.
SPIVAK: You have been a student, I am sure, of the United States, because you taught here for many years. What do you think has started our inflation? We have had inflation for a number of years, and I don’t think that we were printing money at that time or that the Federal Reserve was necessarily dumping a great deal of money. What do you think was responsible for the beginning of our inflation?
VON HAYEK: The belief in the deliberate increase of aggregate demands as a means of creating employment. In effect, what is popularly called belief in Keynesian policies to create employment.
LEVINE: Dr. von Hayek, the general belief among administration economists is that we are near or at the bottom of the recession that we have been going through. Do I understand you to be saying we should be willing to experience a continuation of this period of low economic activity for another year or so rather than to take the kind of efforts that the government has taken of a tax cut in order to stimulate the economy?
VON HAYEK: The matter of the tax cut again aims at increasing aggregate amounts, and the present difficulty is not due to a deficiency of aggregate demand. It is due to the fact that without continued inflation you cannot maintain the people in the new employment in which they have been drawn by the inflation of the past.
LEVINE: I would like to pursue the first part of my question. Do you see a necessity, in order to avoid a resurgence of inflation, that the government undertake policies which will continue us at the present low level of economic activity for a period of a year or more?
VON HAYEK: Not necessarily at the low level, but we should not produce more than a very slow recovery. I would like to add this: The slower the recovery is, the better are the chances that it will last.
LEVINE: In a speech before a congressional group not long ago, you said that the threat to the free enterprise system of our society has never been more imminent than it is now. What did you mean by that?
VON HAYEK: Because I am afraid that government will continue to inflate to combat unemployment and try to meet the effects by imposing price controls, and if we use price controls for that purpose, we are driven into a centrally planned system.
WILL: Thirty years ago, Dr. von Hayek, you stressed and have subsequently stressed that political and economic liberties must either flourish together or perish together. Do you see signs, specifically in the United States today, or in Great Britain, with which you are familiar, that political liberty is endangered?
VON HAYEK: In Great Britain certainly. When it is quite clear that by the established democratic process you cannot conduct that kind of economic policy the present governing party wants to conduct, the danger of a reduction of political liberty in Great Britain is considerable.
In this country this is not so imminent, very largely for the reason that the efforts have not been directed so much towards a nationalization and direct government controls of industry, but the attempts have been made by a redistribution of incomes by taxation, and that is a much slower process. I think it tends in the same direction, but much more slowly than the other one.
ROWEN: Dr. von Hayek, how do you rate the impact of market power wielded by either unions or corporations as a factor in inflation? You seem to be putting all of the stress on the quantity of money and the printing press. Isn’t part of our inflation and part of the inflation in some other parts of the world due to the excessive market power of labor unions and corporations?
VON HAYEK: Never directly, when it may well be and frequently happens that because of the power of the unions, perhaps of the corporations, government feels compelled to inflate. It becomes the inducement for government action, but the immediate cause is always increase of the quantity of money by government, whatever the inducement to do so.
ROWEN: Returning to the crisis in Great Britain, the Chancellor of the Exchequer told me on Wednesday that the Cabinet will consider a return to a formal wage-price-incomes policy. What effect, if any, do you think that would have on the very high level of British inflation in wages and prices?
VON HAYEK: I don’t think it will help at all. You see, it might be necessary as a temporary measure, at the moment when you are in a position to stop the increase of the quantity of money. I do not see any prospect at all in the near future of the British government effectively stopping an increase in the quantity of money. In that situation you just disguise the effects of inflation for a time.
ROWEN: What would be your prescription for the ills that afflict Great Britain?
VON HAYEK: It is a problem of first persuading the public that in the present situation the pressure of the trade unions does not deserve public support. That you must achieve before you can do anything by legislation, reducing the powers of the trade unions. It must be a long process. I don’t see any immediate cure.
SHANAHAN: Professor von Hayek, you have always stressed government actions that inflate and government planning and controls as a great danger to our political freedom.
Many Americans see another scenario for loss of freedom in this country, which is economic policies that now have unemployment in the center cities among black youths over 40 per cent and that their anger and frustration can lead to violence which in turn will lead to repressive governmental action.
What do you say to that scenario? Can we just sit idly by and let that happen?
VON HAYEK: No, but it is with respect to the same cause. The unemployment of which you speak, which is the initial cause, is due to labor being temporarily directed into places or activities or industries where they cannot be maintained without further inflation. Therefore you can only cure that by achieving a new redistribution of labor between employments, adaptation to a condition in which aggregate demands need not progressively increase to maintain their employment.
SHANAHAN: You have said in everything you have written and said lately that this is a lengthy process, that we won’t get back to stable money quickly. Meanwhile, what do you do with these urgent problems and human hardships?
VON HAYEK: We must not assume that all problems are solvable in this short period. There are problems which we cannot solve or which trying to solve quickly may do more harm than good.
SHANAHAN: But in the meantime, what do you do with the human hardship and the mounting rage that is certainly building up?
VON HAYEK: I don’t think there is anything I can do about it. We will have to tide over the storm which may be threatening.
SPIVAK: Dr. von Hayek, may we get a bit specific on one particular thing, and that is Great Britain? You are a citizen of Great Britain. You have taught there and I think you know something about the economy there. As I understand it, their inflation rate may hit as high as 50 per cent. What is the consequence of something of that kind? What do you see is going to happen in the country of which you are a citizen?
VON HAYEK: You’ve got a very severe economic crisis with very extensive unemployment the moment inflation stops. We will probably have repetitive attempts to restart the process by returning to inflation. We will probably combat the wrong thing, the effect of inflation on prices by price controls. That will lead to centrally-directed economy, which will weaken the international economic position of Britain even worse, and that will probably result in the position that somebody may decide that the direction of economic policy has to be completely changed.
I almost hope that the severe crisis will come soon, won’t be a long, dragged out process of misery, but I don’t see any immediate chance with the present political situation in England of such a complete change in the economic policy as would be required.
SPIVAK: Are you saying that England is either going to go bankrupt or England is going to become a dictatorship? What specifically do you mean is going to happen in Great Britain?
VON HAYEK: The English people are beginning to experience, which they hardly have yet, that they have become very much poorer and are rapidly getting poorer still and that will lead to the resolution or the recognition that the policy of the past was wrong.
The amazing fact is that a great majority of the British people are not yet consciously aware that they are living in a very severe economic crisis, and for that reason they are not willing to consider themselves a complete change in policy.
SPIVAK: But what do you think is going to happen since you believe that? What is going to happen there? Are they going bust, or are they going into a dictatorship?
VON HAYEK: No country can go bust. All that can happen is that the economic conditions of daily life get much worse through scarcities. People will find their income is no longer sufficient to maintain their standard of life. They will come to distrust both the present government and the present policies and may then be willing to return to an altogether different system. But I am not a prophet. I can’t say how soon.
SPIVAK: And do you think if we follow along our present footsteps the same thing is going to happen to us?
VON HAYEK: Yes, but in 10 or 20 years’ time. It is not a problem for the immediate future.
LEVINE: Dr. von Hayek, to try to translate some of the things that you have been saying into the terms of the pocket-book of the average American, what advice would you give an American with savings of 20, 30, maybe 100,000 dollars? What should he do with that money to protect it against the problems of inflation that you have been discussing?
VON HAYEK: I still believe there is nothing better than putting it into equities, although that even doesn’t promise him today that it will actually preserve it, but it gives him a good chance of preserving a substantial portion of it.
LEVINE: Dr. von Hayek, these theories which you have gained such recognition for over a period of years have warned consistently, as has been pointed out, of the dangers and threats of inflation, and yet this country has undergone inflation for a great many years and the standard of living has consistently increased.
Does this lead you to question in any way your thesis?
VON HAYEK: Not in the least, because the dangers of inflation are very different ones. They are exactly the kind of unemployment which is now arising. I mean in the usual discussion there is quite a wrong emphasis. There are many bad effects of inflation, but the worst is that it draws labor into employments where they can be kept employed only by accelerating inflation, and the point inevitably arises when inflation cannot be accelerated sufficiently fast to keep them in that inflation. Inflation is like overeating and indigestion. Overeating is very pleasant. So is inflation. Indigestion comes only afterwards, and therefore people do not see the connection.
SPIVAK: We have less than two minutes.
WILL: Dr. von Hayek, capitalism, and particularly American capitalism would seem to have a good record at giving people a rising standard of living.
Why are so many intellectuals and particularly so many economists skeptical about and even hostile to capitalism?
VON HAYEK: I have been puzzling about it for a long time, particularly about the economists who also understand better, and it is very difficult to know why they don’t. I think it is an attraction of a system an intellectual attraction of a system which you can deliberately control, which is fascinating to the intellectual.
ROWEN: Dr. von Hayek, coming back quickly to Great Britain, isn’t it possible if we pursued your philosophy and theory that we might destroy capitalism there, rather than save it, looking at the analogy of the Italians?
VON HAYEK: No, it is not likely to become worse. The present tendency would destroy capitalism inevitably. I think the important thing is that people are given a chance to change their mind before it is irrevocably destroyed.
SPIVAK: I am sorry to interrupt, but our time is almost up, and we won’t be able to get another question and another answer.
Thank you, Dr. von Hayek, for being with us today on MEET THE PRESS.
Source: Hoover Institution Archives. Papers of J. Herbert Furth, Box 6.
Image Source: Los Angeles Daily News, E-Edition. May 10, 2024. “Friedrich Hayek tried to warn us about the ‘social justice’ left.” Photo credit: AP Photo/Charles Harrity). Note: the date of this Meet the Press photo is incorrectly given as June 23, 1975 (which was a Monday).
While the following report found in George Stigler’s papers at the University of Chicago archives is undated, it appears to have been written sometime soon after Arnold Harberger’s appointment in 1954. This is consistent with the sections of T. W. Schultz’s memo to the Dean Chancy D. Harris dated 22 September 1955 that deal with Economic Development.
[…]
The broad area of Economic Development requires major attention and it should be placed high on our agenda as we develop plans and staff during the next few years:
This area is needed to serve especially graduate students from foreign countries.
The economic problems are important to the U.S. scene also.
The Research Center for Economic Development and Cultural Change and importantly the “Journal” it has established need to be drawn into this new effort.
Major new research resources are required.
[…]
Some Concrete Steps
[…]
To establish the new enterprise now contemplated in Economic Development about $50,000 a year appears essential.In this area, a professorship, a visiting professor for each of the next several years, complementary staff, student research in a workshop and support for the Journal “Economic Development and Cultural Change.”
Cf. “Salt-water” Development Economics at the time:
Report to Department of Economics on the Field of Economic Development
At its last meeting the Department of Economics discussed the possibility of establishing a special field in Economic Development and the Chairman appointed a Committee to report in preliminary fashion to the Department on this issue.
Whether a special new field should be established in the Department depends primarily on practical considerations. Economics, as a discipline, is a unified body of social science and logically the whole area of economic studies can be subdivided only into substantive and methodological and applied fields. However, there exist already in the department a whole series of applied fields, each of which is accepted as a separate specialty for research on the doctoral level. We have labor economics, international economics, agricultural economics, public finance, and others. The question which we may have to answer is whether economic development is a field of applied economics roughly commensurate with these others.
A special field in economics becomes established generally when there develops a literature centering around a body of related problems, which have common institutional background. The underlying basic theory is an integral part of general economic theory, but in the course of specialized work a number of theoretical issues come to be discussed in some detail in a given field which tend to attract the interest not so much of general economists but specialists in this field. The question of whether economic development may be regarded as special applied field boils down, therefore, to the question of (1) whether there exists a set of specialized theoretical propositions to which particular emphasis is being given by students interested in (or specializing in) economic development and (2) whether there is an institutional background in terms of which related problems (some of which may be theoretical and abstract and others of which may be practical-empirical) are being studied.
It seems to us that both of these conditions hold for economic development as it is being conceived now. Among theoretical contributions which have already been made we may refer to writings of P. T. Bauer and B. S. Yamey, J. Tinbergen, W. A. Lewis, M. Abramovitz, G. M. Meier, P. N. Rosenstein-Rodan, W. W. Rostow, S. Kuznets, A. O.
Hirschman, Colin Clark, H. W. Singer, and others. We do not wish to enter into the discussion of the quality of any or all of these writings, but we believe that, in general competence and quality they are about equal with writings in other fields or economics during the last ten years. Certainly the literature on economic development is large (and if anything, growing) and a number of scholars who have not made the study or economic development a central concern have contributed some articles and papers to the discussion. (Among them are men like J. Viner, T. de Scitovsky, Hollis Chenery, Martin Bronfenbrenner, Henry C. Wallich and others.)
In addition to this literature which mainly deals with general or more special theoretical issues in economic development there is a vast and even more rapidly growing literature on the institutional and policy aspects of economic development. Here we are concerned mainly with the analysis of poor countries and we note a mass of problems which are pertinent, many of which go beyond the boundaries of strict economic analysis and reach over into anthropology, political science, or history. It would be futile to mention all the questions that arise in this context but as brief reminder we might suggest that such problems as Kuznets’ and other students’ discussion of historical and cross-national comparisons of patterns of growth (changes in labor force, level of income, rate of investment, etc.) is one big field of study, that questions of the patterns of resource allocation in poor societies is another, and that the problem of the formation of human capital with special reference to poor societies and their capacity of growth is a third. In addition, and especially in view of the manifold efforts to engage in developmental planning in many poor countries, we have a broad field for the analysis of economic policies of various kinds. It seems, therefore, that in terms of theoretical as well as practical, empirical, historical, and policy problems there exists a more or less well recognizable field of interest, that there is an abundant and rapidly growing literature, and that there is wide-awake interest in this field not only in this country, but in many other countries as well.
In addition there is considerable interest among the students in economic development. It is granted that many students who express an interest in economic development do so for wrong reasons, but it may be assumed that a large proportion (especially of the foreign students who come from the poor countries), have a genuine interest in studying the problems of poor countries and in acquainting themselves more fully with the institutional and analytical problems characteristic of these countries. It seems that this demand, to the extent to which it justifiably exists, should be recognized by the department and steps should be taken to try to meet it as far as possible.
The Department does not now have a regular program on the graduate level in economic development. Whereas in other applied fields, e.g., labor economics or agricultural economics, we have a set of well-designed and well-integrated courses (well-integrated with the offerings in general theory and among one another), we do not have such a program in economic development. This, however, can be remedied and if the Department decides to make economic development a field of its own, commensurate with other fields in the Department, instruction can be arranged to provide the necessary preconditions for research training.
In view of the arguments raised earlier, this committee recommends to the Department that economic development should be recognized as a field for the M. A. and the Ph. D. degree in the Department of Economics.
We would like to distinguish three possible actions that the department might take with respect to the field of economic development.
1) We can accept it as a field for the distribution requirement.
2) We can accept it as a field of concentration for the Master’s degree
3) We can accept it as a (preliminary examination) field for the Ph. D. degree.
We are in favor of taking actions (1) and (2) at the present time, and of deferring until some future date any action on (3). Our motives for this action are the following:
We recognize that a body of literature exists in the field of economic development, and that the bulk of economists think of economic development as a “legitimate” field of specialization, and we see no point whatsoever for us to be offering courses in the field (as we now do) and at the same time “snub” the field when it comes to distribution requirements. Hence, we are for action (1).
There is considerable interest, particularly among our foreign students, in the field of economic development. There also appears to be at least latent interest among the faculty in offering additional courses in the field, at least if this does not entail a net addition to the teaching load of the individuals in question. We favor expanding our offerings in the field of economic development to the extent that this can be done without jeopardizing the rest of our program. With one course additional to our present offerings, we will be giving our students enough background in the field to warrant our accepting it as a field of concentration for the Master’s degree. Hence, we are for action (2). But if we take action (2) we should make sure that we add at least one course which really covers the core of the economic development literature.
The reason for deferring action (3) at the present time is that the courses that we are now offering in the field of economic development have arisen as a result of the special interests of members of our faculty in particular topics in the field and do not reflect any attempt at an organized “coverage” of the field such as we have in other areas. Before taking the step of offering Ph. D. examinations in economic development, we feel we should (a) decide on what we as a department feel should be the scope and general content of a Ph. D. field in economic development, and (b) develop a set of courses, presumably including some which we do not at present give, whose content reflects this decision.
It seems to us that the basic decision of the department on the first question should be whether our work in the field of economic development should mainly focus on a critical survey and evaluation of the work that now goes on under the label of economic development, or whether we should aim at having a field of somewhat broader scope. One suggestion for broadening the scope of the field is that we include in it some courses designed more directly than our present offerings to prepare students for the kinds of problems that the bulk of economists in underdeveloped countries in fact have to face, even though such courses would also be listed under present fields as well as economic development.
Arnold Harberger
D. Gale Johnson
Bert F. Hoselitz
Source: University of Chicago Archives. George Stigler Papers, Box 3, Folder “U of C. Econ. Miscellaneous”.
To gauge the scale and scope of economics departments it is useful to have copies of the annual announcements/brochures. In this post we add a transcription of the announcement for advanced instruction and research in economics at the University of Chicago for 1956-57.
THE UNIVERSITY OF CHICAGO DEPARTMENT OF ECONOMICS announces Advanced Instruction
and Research Training in ECONOMICS:
Price Theory
Money and Banking
Economic History
Statistics
Econometrics and Mathematical Economics
Agricultural Economics
Government Finance
International Economic Relations and Economic Development
Economics of Consumption
Labor Economics and Industrial Relations
SESSIONS OF 1956-1957
___________________________
DEPARTMENT OF ECONOMICS
Officers of Instruction
Theodore William Schultz, Ph.D., Chairman of the Department of Economics and Charles L. Hutchinson Distinguished Service Professor of Economics.
Frank Hyneman Knight, Ph.D., Morton D. Hull Distinguished Service Professor Emeritus of the Social Sciences.
John Ulric Nef, Ph.D., Professor of Economic History.
Earl J. Hamilton, Ph.D., Professor of Economics.
Milton Friedman, Ph.D., Professor of Economics.
Lloyd A. Metzler, Ph.D., Professor of Economics.
Margaret G. Reid, Ph.D., Professor of Economics.
W. Allen Wallis, A.B., Professor of Economics and Statistics.
D. Gale Johnson, Ph.D., Professor of Economics.
Bert F. Hoselitz, A.M., Dr. Jur., Professor of the Social Sciences.
Hans Theil, Ph.D., Visiting Professor of Economics.
Harold Gregg Lewis, Ph.D., Associate Professor of Economics.
Arnold C. Harberger, Ph.D., Associate Professor of Economics.
Albert E. Rees, Ph.D., Associate Professor of Economics.
Carl Christ, Ph.D., Associate Professor of Economics.
Simon Rottenberg, Ph.D., Associate Professor of Economics.
George S. Tolley, Ph.D., Assistant Professor of Economics.
Robert Lloyd Gustafson, A.M., Assistant Professor of Economics.
Phillip David Cagan, Ph.D., Assistant Professor of Economics.
Martin Jean Bailey, Ph.D., Assistant Professor of Economics.
Chester Whitney Wright, Ph.D., Professor Emeritus of Economics.
Hazel Kyrk, Ph.D., Professor Emeritus of Economics and Home Economics.
Lloyd W. Mints, A.M., Professor Emeritus of Economics.
Mary Barnett Gilson, A.M., Assistant Professor Emeritus of Economics in the College.
Fellows, 1955-56
Richard King, Ph.D., Postdoctoral Fellow in Political Economy.
Yossef Attiyeh, A.M., Falk Foundation Fellow,
Milton Frank Bauer, A.M., Canadian Social Science Research Council Fellow.
John Allan Edwards, A.M., Sears, Roebuck Fellow in Agricultural Economics.
Lawrence Fisher, A.B., Earhart Foundation Fellow.
B. Delworth Gardner, S.M., Sears, Roebuck Fellow in Agricultural Economics.
Hirsh Zvi Griliches, S.M., Social Science Research Council Fellow.
Marc Leon Nerlove, A.M., Earhart Foundation Fellow.
Hugh Oliver Nourse, A.B., Woodrow Wilson Fellow.
Walter Yasuo Oi, A.M., Owen D. Young Fellow.
Boris Peter Pesek, A.M., Ford Foundation Fellow.
Duvvuri Venkata Ramana, A.M., Ford Foundation Fellow.
Jean Reynier, Diplôme D’études Supérieures De Doctorat, University of Paris Exchange Fellow.
Robert Oliver Rogers, A.M., Sears, Roebuck Fellow in Agricultural Economics.
John William Louis Winder, A.M., Edward Hillman Fellow.
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Introductory
The Department of Economics views the central problem of economic science as that of understanding the social organization of human and other scarce productive resources: principally the allocation of these resources among alternative uses by a system of exchange. The purpose of the Department is both to train economic scientists and to advance economic science.
The Department offers programs of instruction and research training not only for students seeking an advanced degree in economics at the University of Chicago but also for students working on an advanced degree at another institution who wish to complement the training available to them there and for students not seeking an advanced degree but who wish to pursue advanced study in economics at either the predoctoral or the postdoctoral level. Instruction is provided in all of the major fields of economics affording opportunity for well-rounded training in economics. Additional facilities in other parts of the University, including those in the other social sciences, mathematics, statistics, business administration, law, and philosophy, permit students wide choice among supplementary areas of study.
Courses of instruction at three levels of advancement are offered by the Department:
1. Intermediate courses (numbered in the 200’s) for those completing their work for the Bachelor’s degree and for others preparing for advanced training in economics.
2. Courses in economic theory, statistical inference, economic history, and economic analysis related to problem fields (numbered in the 300’s) that provide the strong theoretical foundation and related applied knowledge required of all candidates for advanced degrees in economics as preparation for economic research. Students are urged before entering these courses to acquire a command of the rudiments of the differential calculus.
3. Courses (including seminars, workshops, and other research working groups, and individual instruction) that provide arrangements for research and research supervision (numbered in the 400’s). These courses apply and seek to teach students to apply the foundations of economic analysis to research on particular economic problems.
THE ECONOMICS RESEARCH CENTER
The Department devotes a large proportion of its resources to research in economics and to the training of student research apprentices. The purpose of the Economics Research Center is to co-ordinate the research and research training activities of the Department. The Center supplies essential clerical, computing, and reference library services, assists in the organization of research seminars and working groups, and publishes the major research output of the Department in its series: “Studies in Economics.”
Some of the research training in the Center is organized on a continuing basis by one or more faculty members working with associates and students in research groups. (The staffs and research projects of these groups for the academic year 1955-56 are listed below.) Research training and facilities for research are available, however, to all qualified students, both those associated with a research group and those engaged in individual research.
Projects and Staffs of Research Groups, 1955-56
Workshop in Money and Banking
Faculty: Professors Cagan and Friedman.
Research Assistants and Fellows: Yossef Attiyeh, Hugh Roy Elliott, Duvvuri V. Ramana, and Robert E. Snyder.
Project: The role of monetary and banking factors in economic fluctuations.
Office of Agricultural Economies Research
Faculty: Professors Gustafson, Johnson, Schultz, and Tolley.
Research Associates: John A. Dawson, Cecil B. Haver, William E. Hendrix, Lester G. Telser, and Joseph Willett.
Research Assistants and Fellows: Marto Ballesteros, Michael Joseph Brennan, Donald S. Green, Hirsh Zvi Griliches, Vaughan Stevens Hastings, Roy J. Kelly, Edward Franklin Renshaw, James A. Rock, and Clifton R. Wharton, Jr.
Projects: (1) Agricultural inventories. (2) Conservation and development of natural resources. (3) Technical assistance in Latin American countries. (4) Developments affecting Negro farm families. (5) Soviet agriculture. (6) Technological growth in agriculture (hybrid corn). (7) Growth in output per unit of input in the United States and in agriculture.
Research Group in Labor Economics and Industrial Relations
Faculty: Professors Lewis, Rees, Rottenberg, and Seidman.
Projects: (1) The American worker as a union member. (2) Labor in the Mexican economy. (3) Real wages in the United States, 1890-1914. (4) Population, the labor force, and labor supply.
Research Group in Public Finance
Faculty: Professors Bailey and Harberger.
Research Assistants and Fellows: Meyer L. Burstein, Lawrence Fisher, Yehuda Grünfeld, Marc Leon Nerlove, William A. Niskanen, Jr., and Walter Y. Oi.
Projects:
(1) Resource allocation effects of federal taxes and of agricultural price supports.
(2) Sources and methods of controlling cyclical instability in the American economy.
(3) The capital market effects of federal taxation, expenditure, and regulatory policies.
Research Group in Economics of Consumption
Faculty: Professor Reid.
Research Assistant: Juliette Rey.
Project: Trends in, and factors determining, consumption levels.
Research Group in Economic Development
Faculty: Professors Hamilton, Harberger, Hoselitz, Rottenberg, and Schultz.
Projects: (1) Problems in the economic development of Chile. (2) Historical research in money, banking, prices, and interest rates, their interrelationship, and their role in the economic development of leading countries. (Note also projects (3), (6), and (7) of the Office of Agricultural Economics Research and project (2) of the Research Group in Labor Economics and Industrial Relations.) The Research Group in Economic Development works closely with the Research Center in Economic Development and Cultural Change of which Mr. Hoselitz is the director. The Center engages in research and publishes the journal Economic Development and Cultural Change.
Three members of the faculty of the Department are associated with research groups organized in other parts of the University: Mr. Hoselitz with the Research Center in Economic Development and Cultural Change; Mr. Nef, with the Committee on Social Thought; and Mr. Wallis, with the Committee on Statistics. In addition, other members of the economics faculty are engaged in individual research projects not associated with a research group: Mr. Metzler on the theory of international adjustment under conditions of full employment and high demand: and Mr. Christ on econometric research on economic growth and technological change.
FELLOWSHIPS, SCHOLARSHIPS,
AND RESEARCH ASSISTANTSHIPS
Students who wish to pursue a program of advanced instruction and research in economics at the University may compete not only for the regular University Fellowships and Scholarships described in these Announcements (see pp. 22-27) but also for the fellowships listed below:
[Note: The announcement transcribed here is a reprint of the Department of Economics section of the Announcements of Graduate Programs in the Divisions. Cross-references are to that publication]
Postdoctoral Fellowships:
Postdoctoral Fellowship in Political Economy awarded upon recommendation of the Department of Economics.
Postdoctoral Fellowships in Money and Banking awarded by the Workshop in Money and Banking in co-operation with the Department of Economics.
Predoctoral Fellowships:
Awarded upon recommendation of the Department of Economics:
Frank H. Knight Fellowships, Marshall Field Fellowship, Edward Hillman Fellowship Awarded upon recommendation of the Office of Agricultural Economics Research for students specializing in agricultural economics: Sears, Roebuck Foundation Fellowships in Agricultural Economics
Stipends for the predoctoral fellowships, including the regular University fellowships, range generally from $1,000 to $3,000 per annum. Stipends for the postdoctoral fellowships range up to $4,000 per annum. Application blanks may be obtained from the Department of Economics or from the University Committee on Fellowships and Scholarships.
Research Assistantships
Research assistantships and associateships are available to qualified students who have research interests in particular problem areas. Application blanks for these positions may be obtained from the Economics Research Center.
ADVANCED DEGREES
The Department of Economics offers programs leading to both the A.M. and the Ph.D. degrees in Economics. The following paragraphs summarize briefly the major Departmental requirements for advanced degrees for students holding a four-year Bachelor’s degree or its equivalent. (The following paragraphs are not intended as an exhaustive statement of the requirements for advanced degrees; for the details of the requirements students should consult with the Departmental counselors.)
THE DEGREE OF MASTER OF ARTS
The Departmental requirements for the Master’s degree in Economics for students holding the traditional four-year Bachelor’s degree include: (1) satisfactory performance on two of the written field examinations in economics required for the Ph.D. degree; (2) a satisfactory command of the principles of economic theory; and (3) acceptance of a paper or report on a problem approved by the Department,
THE DEGREE OF DOCTOR OF PHILOSOPHY
The Departmental requirements for admission to candidacy for the degree of Doctor of Philosophy in Economics include: (1) satisfactory performance on written field examinations in price theory and monetary theory and banking and in one other field that, with the approval of the Department, may be a field outside of economics; (2) a well-rounded command of the subject-matter of the major fields of economics; (3) effective reading knowledge of French or German or some other foreign language approved by the Department; and (4) acceptance of the candidate’s thesis prospectus.
The Departmental requirements for the degree include in addition to the preceding requirements for admission to candidacy: (1) effective reading knowledge of a second foreign language or completion of an approved substitute program of study; (2) departmental approval of the completed thesis; and (3) satisfactory performance on a final oral examination on the field of the thesis.
SUMMER PROGRAM
FOR COLLEGE TEACHERS OF ECONOMICS
The Department of Economics will give particular attention in its Summer Quarter 1956 program to the interests of college teachers of economics, both those working for the Ph.D degree at another institution and others who wish to renew or to complement their training and experience in economics. A limited number of tuition and half-tuition scholarships will be available for teachers who do not hold the Ph.D. degree. (Application blanks for these scholarships may be obtained from the Department of Economics.) For those who hold the Ph.D. degree in Economics or related fields the Department invites application for guest privileges.
Courses of Instruction
INTERMEDIATE COURSES
208. A, B, C. The Elements of Economic Analysis. Aut (208A): Rees; Win (208B) Rees; Spr (208C): Cagan.
209. Intermediate Price Theory. Prereg: Math 150A or equiv. Aut: Lewis.
210. Index Numbers, National Accounting, and Economic Measurement. Prereq: Soc Sei 200A and Econ 209, or equiv. Aut: Christ.
213. Introduction to Mathematics for Economists. Prereq: Econ 209 and Math 150A, or equiv. Sum: Staff; Win: Theil.
220. Economic History of the United States. Spr: Hamilton.
240. Introduction to Industrial Relations. Win: Staff.
255. Introduction to Agricultural Economics. Prereq: Econ 208A and 208B, or equiv, Spr: Johnson.
260. Introduction to Government Finance. Prereq: Econ 208A and 208B, or equiv. Win: Bailey.
271. Economic Aspects of International Politics. Aut: Hoselitz.
300. A, B. Price Theory. Prereg: For 300A, Econ 209 or equiv, and Math 150A or equiv, or consent of instructor; for 300B, 300A. Aut (300A): Friedman; Win (300A): Wallis; Spr (300B): Friedman.
301. Price and Distribution Theory (= Social Thought 382). Prereq: Econ 209. Sum: Knight.
302. History of Economic Thought (= Social Thought 381). Prereq: Econ 301 or equiv. Spr: Knight.
303. Recent Developments in Economics. Prereg: graduate work in economic theory. Sum: Harberger.
305. Economics and Social Institutions (= Philosophy 305). Prereg: Econ 301 and some European economic history. Sum: Knight.
308. Welfare Economics. Prereq: Econ 300A or equiv. Sum: Johnson.
309. Mathematical Economics. Prereq: Econ 213 and Econ 300A, or equiv. Win: Theil.
310. Special Topics in Mathematical Economics. Prereq: Econ 309, Math 150C, and the rudiments of matrix algebra; or consent of instructor. Spr: Theil.
II. Monetary Theory and Banking
303.Recent Developments in Economics. Prereg: graduate work in economic theory. Sum: Harberger.
330. Money. Prereg: Econ 208C or equiv. Aut: Staff.
331. Banking Theory and Monetary Policy. Prereg: Econ 330; Econ 335 desirable. Win: Cagan.
334. The Development of Monetary and Financial Institutions. Prereq: Econ 222 or 208C. Spr: Hamilton.
335. The Theory of Income, Employment, and the Price Level. Prereg: Econ 208A, B, C or equiv. Spr: Christ.
362. Monetary and Fiscal Policy. Prereg: Econ 208C; Econ 330 and 335 desirable. Spr: Harberger.
370. Monetary Aspects of International Trade. Prereg: Econ 330, 335, or equiv. Aut: Metzler.
439. Workshop in Money and Banking. An experiment in combining training in research and learning of subject-matter organized around a continuing investigation into monetary factors in business cycles. Students participate in this central investigation both directly and by undertaking individual projects in the general area. Each project is directed toward the preparation of a report of publishable quality. Guidance is provided on general reading in the field, and informal seminars are held from time to time to discuss general issues or specific projects. Students. are required to give full time to the workshop; they receive three credits per quarter of registration. Prereg: consent of instructor. Aut, Win, Spr: Friedman, Cagan.
III. Statistics
311. Principles of Statistical Analysis (= Business 321 and Statistics 301). Aut: Staff.
312. Techniques of Statistical Analysis (= Business 322 and Statistics 302). Prereg: Econ 311 or equiv. Win: Staff.
313. Applications of Statistical Analysis (= Sociology 308, Business 323, and Statistics 303). Prereq: Econ 312 or Stat 362 or equiv. Spr: Wallis.
314. Econometrics. Prereq: Econ 311 and either Econ 300A or Econ 335; Econ 210 desirable. Sum: Gustafson; Win: Christ.
315. Special Topics in Econometrics. Prereq: Econ 312, Econ 314, differential calculus, and rudiments of matrix algebra; or consent of instructor. Spr: Christ.
For other courses in statistics see page 203.
IV. Mathematical Economics and Econometrics
303. Recent Developments in Economics. Prereq: graduate work in economic theory. Sum: Harberger.
309. Mathematical Economics. Prereq: Econ 213 and Econ 300A, or equiv, Win: Theil.
310. Special Topics in Mathematical Economics. Prereq: Econ 309, Math 150C and the rudiments of matrix algebra; or consent of instructor. Spr: Theil.
314. Econometrics. Prereq: Econ 311 and either Econ 300A or Econ 335; Econ 210 desirable. Sum: Gustafson; Win: Christ.
315. Special Topics in Econometrics. Prereq: Econ 312, Econ 314, differential calculus, and rudiments of matrix algebra; or consent of instructor. Spr: Christ.
V. Economic History
320. American Economic Policies. Prereg: Econ 220 or equiv. Sum: Hamilton.
329A. The Geographical and Historical Background of the Genesis of Industrial Civilization (= Social Thought 324A and History 332G). Aut: Nef.
329B. The Role of the Discoveries and the Reformation in the Genesis of Industrial Civilization (= Social Thought 325A and History 332H). Spr: Nef.
334. The Development of Monetary and Financial Institutions. Prereg: Econ 222 or 208C. Spr: Hamilton.
VI. Labor Economics and Industrial Relations
340. The Labor Movement. Aut.
341. Labor Problems. Prereq: Econ 208A, 208B, and Econ 240; or equiv. Win: Rees.
Charles Edward Lindblom (1917-2018!)was a Chicago economics Ph.D. (1945) who ultimately climbed as far up the Yale ranks as you could get – a Sterling Professorship of Political Science and Economics. He was working on his 1977 book Politics and Markets when I took a course with him in the Spring semester of 1973. His lectures have left no real mark on me, but I recall my impression of watching a thinker in real time who would dare to attempt to think things through while lecturing. I guess it should come as no surprise that someone who attained fame through an article with the title “The Science of ‘Muddling Through’” (1959), talked the talk the way he perceived policymakers to walk the walk (incrementally).
In a different course (Democracy and its Critics) I experienced his long-time colleague and collaborator Robert Dahl as the opposite model of an equally content-rich but silky smooth lecture style. I am glad to have sat at the feet of both when I was still of an impressionable age.
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From: The Yale Banner of 1960
Associate Professor of Economics CHARLES E. LINDBLOM came to Yale in 1946, after receiving his B.A. at Stanford and his Ph.D. at the University of Chicago. Mr Lindblom has always had an interest in the fields where economics and political science converge, and thus he is active in both areas. In 1951 he held a Guggenheim Fellowship and later he was a fellow at the Center for Advance Studies in the Behavorial Sciences. Mr. Lindblom also assisted former Connecticut Governor Bowles [Fun fact: Gov. Chester Bowles was economist Sam Bowles‘ father.] on the problems of housing and compensation legislation. At present, Professor Lindblom is on a committee on Latin American economics for the Twentieth Century Fund, a consultant for the RAND Corporation, and a consultant to a United States Senate subcommittee. On the Yale scene, he is an advisor to the Political Union and has written Politics, Economics and Welfare with Mr. [Robert] Dahl and Unions and Capitalism; he is working on several books now. What time he can salvage from this busy schedule is devoted to woodworking and sculpting. Next year he will be a Ford Faculty Fellow in economics.
Biblical Greek Scholar/Theologian Ernest Cadman Colwell served under Chancellor Robert M. Hutchins as the president of the University of Chicago from 1945 to 1951. Theodore W. Schultz was the relatively new head of the Department of Economics who met with Colwell in late September 1946 to brief the president on developments in the economics department, especially with respect to efforts being made in pursuit of several economists needed to fill the gaps left by Henry Simons’ death (1946), Chester W. Wright’s retirement (1944), resignations by Jacob Viner (1946) and Simeon E. Leland (1946), and Oskar Lange’s leave of absence (1945-).
We see in the memorandum of conversation transcribed below that John and Ursula Hicks posed a spousal hire issue needing a creative solution before an actual offer could be made and that sixty year old Frank Knight was due some sort of a “senatorial courtesy” to get him on board with the majority of the department who badly wanted to extend an offer to thirty-one year old Paul Samuelson.
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Chicago Economics in 1946
Mitch, David. “A Year of Transition: Faculty Recruiting at Chicago in 1946.” Journal of Political Economy 124, no. 6 (2016): 1714–34. https://www.jstor.org/stable/26549915. Especially the online supplemental materials, where the following memo is quoted in part.
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More on the Pursuit of Samuelson
by Chicago
Harro Maas, “Making Things Technical: Samuelson at MIT” in E. Roy Weintraub (ed.) MIT and the Transformation of American Economics (Durham: Duke University Press, 2014), pp. 272-294.
Roger Backhouse. Founder of Modern Economics: Paul A. Samuelson. Vol. I: Becoming Samuelson, 1915-1948 (Oxford University Press, 2017), Chapter 28 “Commitment to MIT.”
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Discussion with Ernest C. Colwell (25 September 1946)
This discussion with President Colwell was highly satisfactory in that we considered in some detail and carefully, a number of important developments affecting the Department of Economics as follows:
1. I indicated to Mr. Colwell that the role of the Department of Economics at the University of Chicago should be reviewed, with the view of achieving a better division of labor among universities within the U. S. and internationally. An increasing number of universities can do creditable undergraduate work in economics, and also satisfactory graduate work up to and beyond the master’s. There are upwards of two score of such institutions in the U. S. Meanwhile, the number of students seeking training at the undergraduate level, and also in graduate work, has increased rapidly, and the post war promises further growth in numbers. Meanwhile, many Western countries are looking to the U.S. for some of their advanced education in other fields as well as in economics), this along with the development that is taking place within the U. S., suggests that the time has come for the University of Chicago to allocate its resources even more largely to the most advanced reaches of economics. I proposed that we examine carefully the implications of this kind of refocusing of our program. I was pleased that Mr. Colwell found himself drawn to the kind of analysis I was presenting. He made several contributions to it and concurred with the analysis itself. He very cordially urged the Department to examine this thesis and reconstitute itself to serve more effectively, taking full account of the division of labor within American academic institutions.
2. I reviewed in some detail the state of the Department, pointing out the losses that have come as the result of the death of Simons, the retirement of Wright, the resignations of Viner and Leland, and the leave of absence of Lange. I expressed our pleasure in achieving the appointment of Friedman and Blough, and reaffirmed my confidence in our judgment in seeking these appointments.
With regard to additional appointments, the following individuals were discussed.
(1) Mr. and Mrs. Hicks. I reviewed the agreements we had with Mr. Hutchins, which were the foundation of negotiations last spring. I indicated that the Hicks would arrive this week to be with us the fore-part of the fall quarter. If as a result of this opportunity of being together during part of the fall quarter, the Hicks see a real opportunity for their professional efforts at the University of Chicago, and we continue to be genuinely interested in bringing them to this University, would we be permitted to offer Mr. and Mrs. Hicks the salaries and positions that we had discussed last spring realizing we might have to go higher in the case of Mr. Hicks, for I was convinced his standing warranted our paying the maximum. Mr. Colwell said he was willing to authorize an offer of $10,000 to Mr. Hicks, and probed with me for a while the merit of making it higher instead of offering a position to both individuals. It was my judgment that our bargaining power would be at a maximum if we would offer both individuals a position, but that we could escape the liability of dual membership in one family by making the offer to Mrs. Hicks a term appointment — perhaps that of a Lecturer or Research Associate, say for three years at $3,000, and then reconsider at the end of three years, where she would have the privilege of withdrawing or redefining her relationship, and the Department would likewise have that privilege. Thus, the commitment would be permanent in the case of Mr. Hicks, but meaningful in terms of time turned into professional task to Mrs. Hicks and yet allowing flexibility in her case. Mr. Colwell accepted my proposal to proceed with an offer to both Mr. and Mrs. Hicks along the lines I have outlined.
(2) I reported Mr. Viner’s observations that it was not likely Mr. Robbins would leave the London School of Economics, and that, at least for a year, there was no point in making an indirect approach again to see whether or not he might feel free to accept an appointment in this country. Mr. Colwell fully concurred.
(3) I reviewed our offer to Mr. Colin Clark to come to the University of Chicago as guest professor for a year. I also pointed out we had included in the offer $1000 for travel expenses. I Indicated further that several of my colleagues were disposed to feel that we should now make an offer of a permanent appointment to Mr. Clark, since he is not able to obtain leave of absence to come as visiting professor. I then indicated why I felt, although tentatively, that it was unwise to make this move for a permanent relationship with the Department until we had a chance to become personally acquainted with Mr. Clark, although I continue to have a high regard for his professional work as evidenced by his major writings. Mr. Colwell concurred with the view I expressed, namely, we should not make an appointment on a permanent basis, but should try to get Mr. Clark to come as a visiting professor, if not this year, perhaps next year.
(4) I reviewed the case of Albert G. Hart, indicating that he had accepted a position at Columbia before we could approach him with an offer, and that it was important to his own growth to take the position at Columbia for a year. My plan is to approach him at the end of the year, let him weigh alternatives, including the opportunities as he sees them at Columbia. My proposal to Mr. Colwell was that we approach Hart along in February or March in order to induce him to come to Chicago. We discussed Hart’s background in some detail, Mr. Colwell concurred in the procedure I outlined to him.
(5) I then outlined at some length the case of Paul Samuelson of M.I.T. Mr. Colwell had not had the privilege of visiting with Samuelson at the time he was here. Samuelson visited with Hutchins and Gustavson, as far as Central Administration was concerned. I stated it was my judgment that Samuelson is one of the younger men in economics who has a high probability of achieving a distinguished career as an economist, and that in this respect his promise is most outstanding; that I had no doubt of the merits of the case intellectually and would press for an appointment, were that the only consideration, without delay, but that I had to achieve, however, an acceptance of Mr. Samuelson in the Department, not that a majority was lacking; a mandate existed satisfying the University administrative requirements. But the obstacle lies in what in substance is a matter of “senatorial courtesy” in behalf of the most distinguished and senior member of the Department, Professor Frank Knight. I expressed the hope it would be possible to have Professor Knight concur in the appointment and feel it was being made without any discourtesy to him and his professional role and standing in this University and in the profession. I felt this end must and could be achieved and that I was going to give a great deal of effort to it in the coming months. Pending the full exploration of what can be done in this connection I wanted to reserve decision as to whether or not to recommend the appointment of Mr. Samuelson. Mr. Colwell discussed at some length his own appraisal of the problem I had presented. He seemed to be pleased with the approach that was implicit in what I was relating to him. He made the point, and made it explicitly, that if the intellectual stature of Samuelson is as high as my judgment indicated, that it was exceedingly important the University move toward an appointment. I felt sure, though, that he was disposed to await the wishes of the Department, weighing carefully the factors I had tried to describe to him.
At this point Mr. Colwell took me back to my general thesis, namely, the refocusing of the goals of the Department and the use of its resources, urging me to give active attention to this task. Whereupon I suggested the achievement of this role might well mean the setting up of 5 to 7 positions in the Department for individuals to spend 2 to 5 years at this university in what would be essentially a post-doctoral role as scholars, then accept positions elsewhere consistent with their accomplishments and promise. Mr. Colwell was drawn to the proposal as I had put it and referred briefly to similar planning and developments in other fields.
T. W. Schultz.
Source: University of Chicago Archives. Department of Economics, Records. Box 42, Folder “3”.
Beginning in 1957 Zvi Griliches took over the course at Chicago on Price and Income Instability with special reference to agriculture. The course was previously taught by T. W. Schultz. In his files for the course Griliches kept a copy of the course outline and readings for the Spring 1956 quarter taught by his predecessor.
There were 86 numbered items on Schultz’s reading list that he referenced by the item number with chapter/page selections for some of the items. You will have to jump down from the course outline to the list of course readings and back, which I find a very peculiar way to present a course outline, but it didn’t keep him from getting a Nobel prize in economics in 1979.
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T. W. Schultz
University of Chicago
Economics 355 B Price and Income Instability
(as problems in economic organization with special reference to agriculture)
Economics 355 B will cover the following classes of problems:
general characteristics of policies and programs which are related to agriculture.
analysis of the price and income instability that confronts agriculture.
alternative measures for reducing or accommodating price and income instability.
some research proposals directed to this set of problems.
General characteristics of policies and programs for agriculture by types of countries and during different periods.
(to be developed in class)
Analysis of price and income instability that confronts agriculture.
38, chs. 4, 5, 6, 7, 10;
55, chs, 11 and 20.
Instability of the economy as a whole.
19;
5;
23;
50;
67;
44.
Particular instabilities of farm product prices during the stock period.
45: pp. 14-15, 65-66, 76-77;
31, Ch. 2;
10: pp. 42-44;
51.
Producer supply schedule for stock period.
(1) Farm household activities.
55, ch. 14;
49, ch. 6.
(2) Farm-firm activities.
55, ch. 14;
68, ch. 2.
Demand schedule confronting producers restricted to stock period.
Increasing the price elasticity of the relevant schedules.
55, pp. 349-358.
By way of accommodation.
55, pp. 358-366.
Farms with more capacity to cope with price and income instability.
Possibilities by storage.
Safeguarding income during depressions.
Some research proposals
(to be based on III and the research interest of the student)
_________________________
T. W. Schultz
Spring, 1956
Economics 355 B List of Readings
Barber, Lloyd, “Variability of Wheat Yields by Counties in the United States,” BAE (September, 1951).
(a) Barber, E. Lloyd, “Summerfallowing to Meet Weather Risks in Wheat Farming,” Agricultural Economics Research, III (October, 1951).
(b) Barton, Glen T. and Cooper, Martin R., “Relation of Agricultural Production to Inputs,” Review of Economics and Statistics, XXX (May, 1948).
Barber, E. Lloyd and Thair, Philip J., “Institutional Methods of Meeting Weather Uncertainty in the Great Plains,” Journal of Farm Economics, XXXII (August, 1950).
Barber, E. Lloyd, Meeting Weather Risks in Kansas Wheat Farming, Kansas Agr. Ext. Sta. and BAE Agr. Report 44 (September, 1950).
Bennett, M. K. and Associates, International Commodity Stockpiling as an Economic Stabilizer (Stanford: Stanford Univ. Press, 1949).
Blau, G., “Some Aspects of the Theory of Futures Trading,” The Review of Economic Studies, XI (1943-44).
Brownlee, O. H. and Johnson, D. Gale, “Reducing Price Variability Confronting Primary Producers,” Journal of Farm Economics, XXXII (May, 1950).
Burk, Marguerite, “Recent Relationships between Income and Food Expenditure,” Agricultural Economics Research, BAE, III (July, 1951).
___________, “Changes in the Demand for Food from 1941 to 1950,” Journal of Farm Economics,” XXXIII (August, 1951).
Cochrane, Willard W., An Analysis of Farm Price Behavior, Progress Report Agricultural Experinent Station, Pennsylvania State College (May, 1951)
___________, “Farm Price Gyrations — An Aggregative Hypothesis,” Journal of Farm Economics, XXIX (May, 1947).
Day, Emily L. and Barber, Lloyd, Physical Risks in Farm Production, Selected References, 1930-1948. USDA Library, List 49 (August, 1949).
Dow, J. C. R., “A Theoretical Account of Futures Markets,” The Review of Economic Studies, VII (1939-40).
Ellickson, John C., “Hail Insurance on Growing Crops in the United States,” Agricultural Finance Review, BAE, XIII (November, 1950).
Foote, Richard J. and Bean, Louis H., “Are Yearly Variations in CropYield Random?” BAE, Agricultural Economics Research, III (January, 1951).
Fox, Karl A., “Factors Affecting Farm Income, Farm Prices and FoodConsumption,” Agricultural Economics Research, III (July, 1951).
___________ and Norcross, Harry C., “Agriculture and the General Economy,” Agricultural Economics Research, IV (January, 1952).
Friedman, Milton, “Commodity-Reserve Currency,” Journal of Political Economy. LIX (June, 1951).
Galbraith, John K., American Capitalism—The Concept of Countervailing Power (New York: Houghton Mifflin, 1952).
Galbraith, John K., “Economic Preconceptions and Farm Policy,” American Economic Review, XLIV (March, 1954).
Girschick, M. A. and Haavelmo, T., “Statistical Analysis of the Demand forFood,” Econometrica, XV (April, 1947).
Graham, Benjamin, Storage and Stability (New York: McGraw-Hill, 1937).
Halcrow, Harold G., “Actuarial Structure of Crop Insurance,”Journal of Farm Economics, XXXI (August, 1949).
___________, The Theory of Crop Insurance, Ph.D. Thesis, University of Chicago, 1948.
Haley, Bernard F. (ed.), A Survey of Contemporary Economics, Vol. I (Homewood, Ill.: Richard D. Irwin, 1952).
Hardy, C. O., “Recent Developments in the Theory of Speculation,” American Economic Review, XXVII (1937).
___________ and Lyon, L. S., “The Theory of Hedging,” Journal of Political Economy, XXXI (1923).
Hawtrey, R. G., “Mr. Kaldor on the Forward Market,” The Review of Economic Studies, VIII (1940-41).
Heisig, Carl P., “Income Instabillty in High Risk Farming Areas,” Journal of Farm Economics, XXVIII (1946).
Hicks, J. R., Value and Capital (Oxford: Clarendon Press, 1939).
Hicks, J. R., “Theory of Uncertainty and Profit,” Economica, VI (1939).
Hoos, Sidney,“Relations between Agricultural Price Policy and MarketingResearch,” Journal of Farm Economics, XXXIII (August, 1951).
Horton, Donald C., “Adaptation of the Farm Capital Structure to Uncertainty,” Journal of Farm Economics, XXXI (February, 1949).
___________, The Pattern of Farm Financial Structure, National Bureau of Economic Research, a preliminary draft (May, 1951).
___________ and Barber, E. Lloyd, “The Problem of Farm Business Survival in Areas of Highly Variable Rainfall,” Journal of Farm Economics, XXXI, Proceedings (November, 1942).
Houthakker, H. S., “A Proposed Inquiry into Some Markets with Forward Trading,” Cowles Commission Discussion Paper Economics 2036 and Agricultural Economics Research Paper No. 5211, March 21, 1952. Mimeo.
Johnson, D. Gale, Forward Prices for Agriculture (Chicago: University of Chicago Press, 1947).
___________, Trade and Agriculture: A Study of Inconsistent Policies (New York: John Wiley and Sons, 1950).
___________, “The Nature of the Supply Function for American Agriculture,” American Economic Review, XL (September, 1950).
Jones, Lloyd E.,“Stabilizing Farming by Shifting Wheat Land to Grass in Northern Great Plains,” Journal of Farm Economics, XXXII (August, 1950).
Kaldor, N., “A Note on the Theory of the Forward Market,”The Review of Economic Studies, VII (1939-40).
___________, “Speculation and Economic Stability,” The Review of Economic Studies, VII (1939-40).
Keynes, J. M., “The Policy of Government Storage of Food-Stuffs and Raw Materials,” Economic Journal, XLVIII (September, 1938).
Knight, Frank H., The Economic Organization (New York: Augustus M. Kelley, 1951).
Mack, Ruth P., “The Direction of Change in Income and the Consumption Function,” Review of Economics and Statistics, XXX (1948).
Mehrens, George L., “Comparative Costs of Agricultural Price Supportsin 1949,” Proceedings, American Economic Review, XLI (May, 1951).
Nebraska Agr. Exp. Sta., Toward Stability in the Great Plains Economy, Proceedings of a conference held at Custer, South Dakota in 1949. Agr. Exp. Sta. Bul. 399 (July, 1950).
Reid, M. G., Food for People (New York: Wiley, 1943).
Reifler, Winfield, “A Proposal for an International Buffer-Stock Agency,” Journal of Political Economy, LIV (December, 1946).
Robbins, Lionel,“Elasticity of Demand for Income in Terms of Effort,” Economica (1930).
Schickele, Rainer, “Farm Business Survival under Extreme Weather Risk,”Journal of Farm Economics, XXXI (November, 1949),
___________, “Farmers Adaptation to Income Uncertainty,” Journal of Farm Economics, XXXII (August, 1950).
Schultz, T. W., Production and Welfare of Agriculture (New York: Macmillan, 1949).
___________, The Economic Organization of Agriculture (New York: McGraw-Hill, 1953).
Schultz, Henry, The Theory and Measurement of Demand (Chicago: University of Chicago Press, 1938).
___________, “The Shifting Demand for Selected Agricultural Commodities, 1875-1929,” Journal of Farm Economics, XIV (April, 1932).
Stewart, Blair, An Analysis of Speculative Trading in Grain Futures, USDA Commodity Exchange Authority, Bul. No. 1001. October, 1942.
Stone, J. R. K., “Analysis of Market Demand,” Journal of the Royal Statistical Society, CVIII (1945).
Thair, Philip J., Stabilizing Farm Income against Crop Yield Fluctuations, Agr. Exp. Sta. North Dakota and BAE Bul. 362, September, 1950).
Timoshenko, P., “Variability in Wheat Yields and Outputs, Part I. Cycles or Random Fluctuations,” Wheat Studies of the Food Research Institute, XVIII (Stanford, California, 1942).
Tintner, Gerhard,“Multiple Regression for System of Equations,” Econometrics, XIV (January, 1946).
Tobin, James,“A Statistical Demand Function for Food in the U.S.A.,” Journal of the Royal Statistical Society, CXIII (1950), Part II.
U.S.D.A., BAE, Consumption of Food in the United States, 1909-48, Misc. Pub. 691 (August, 1949).
U.S.D.A., BAE, Farm Production Practices, Costs and Returns, Stat. Bul. 83 (October, 1949).
U.S.D.A., Fluctuations in Crops and Weather, 1866-1948, Stat. Bul. 101 (June, 1951).
Viner, Jacob, “International Finance in the Post-War World,”Lloyds Bank Review (October, 1946).
Waugh, Frederick V., Readings in Agricultural Marketing (Ames: Iowa State College Press, 1954).
Williams, J. B., “Speculation and the Carryover,” The Quarterly Journal of Economics, LI (1936).
Working, H. “Theory of the Inverse Carrying Charge in Futures Markets,” Journal of Farm Economics, XXX (1948).
Working, E. J., “Appraising the Demand for American Agricultural Output during Rearmament,” Journal of Farm Economics XXXIV, May, 1952.
Supplementary List #1
Bauer, P. T., West African Trade (Cambridge: The University Press, 1954), esp. Parts 3, 5, and 6.
___________ and Paish, F. , “The Reduction of Fluctuations in the Incomes of Primary Producers,” Economic Journal, LXII (December, 1952).
___________, “The Reduction of Fluctuations in the Incomes of Primary Producers Further Considered,” Economic Journal, LXIV, (December, 1954).
Friedman, Milton, “The Reduction of Fluctuations in the Incomes of Primary Producers: A Critical Comment, Economic Journal, LXIV (December 1954).
Gustafson, Robert L.,Optimal Carryover Rules for Grains, The University of Chicago RMA Study (January 31, 1954). Agricultural Economics Research Paper).
Heady, Earl O., Kehrberg, Earl W., and Jebe, Emil B., Economic Instability and Choices Involving Incomeand Risk in Primary or Crop Production, Res. Bul. 404 (January, 1954) Agric. Exp. Iowa State College.
Heady, Earl, “Diversification in Resource Allocation and Minimization of Income Variability,” Journal of Farm Economics XXXIV (November, 1952).
Johnson, D. Gale, “Competition in Agriculture: Fact or Fiction?”American Economic Review, Papers and Proceedings XLIV (May, 1954).
Kaldor, Donald R. and Heady, Earl O., An Exploratory Study of Expectations,Uncertainty and Farm Plans in Southern Iowa Agriculture, Res. Bul. 408 April, 1954) Agric. Exp. Sta. Iowa State College.
Kaplan, Marshall.On Estimating Demand Parameters With Special Reference to Food, AgriculturalEconomics Research Paper No. 5415. September 24, 1954.
Lee, Ivan M., “Temperature Insurance — An Alternative to Frost Insurancein Citrus,” Journal of Farm Economics, XXXV (February, 1953).
Nordin, J. A., Judge, George G., and Wohby, Omar, Application of Econometric Procedures to Demands for Agricultural Products, Res. Bul 410 (July, 1954) Agri. Exp. Sta. Iowa State College.
Broschures that advertise economics departments are often useful summaries of the “order of battle” for their educational and research missions. The Chicago Department of Political Economy was about a dozen years in business when this programme, transcribed below, was published. The course descriptions are somewhat thicker than are typically found in full university catalogs that must share space for the many divisions and schools that constitute the larger institution.
Incidentally, the copy of the printed programme that was transcribed for this post was found in an archival box of material dealing with graduate studies in the Division of History, Government, and Economics at Harvard University. Then as now, prudence demands keeping an eye on your competition.
______________________________
Related Posts on the Early Years
of the Department of Political Economy
of the University of Chicago
ROBERT MORRIS, A.B, LL.B., Instructor in Political Economy.
F. R. CLOW, Professor of Political Economy, State Normal School, Oshkosh, Wis. (Summer Quarter, 1904).
FELLOWS.
1904-1905.
EDITH ABBOTT, A.B
EARL DEAN HOWARD, Ph.B.
WILLIAM JETT LAUCK, A.B.
INTRODUCTORY.
The work of the department is intended to provide, by symmetrically arranged courses of instruction, a complete training in the various branches of economics, beginning with elementary work and passing by degrees to the higher work of investigation. A chief aim of the instruction will be to teach methods of work, to foster a judicial spirit, and to cultivate an attitude of scholarly independence. (1) The student may pass, in the various courses of instruction, over the whole field of economics. (2) When fitted, he will be urged to pursue some special investigation. (3) For the encouragement of research and the training of properly qualified teachers of economics, Fellowships in Political Economy have been founded. (4) To provide a means of communication between investigators and the public, a review, entitled the Journal of Political Economy, has been established, to be edited by the officers of instruction in the department; while (5) larger single productions will appear in a series of bound volumes to be known as Economic Studies of the University of Chicago. [For links see below]
FELLOWSHIPS.
The Fellowships here offered by the Department of Political Economy are independent of those offered by the allied departments of History, Political Science, or Sociology.
Appointments will be made only on the basis of marked ability in economic studies and of capacity for investigation of a high character. It is a distinct advantage to candidates to have been one year in residence at the University. Candidates for these Fellowships should send to the President of the University a record of their previous work and distinctions, degrees and past courses of study, with copies of their written or printed work in economics. Applications should be sent in not later than March 1 of each year Appointments will be made during the first week of April.
Fellows are forbidden to give private tuition, and may be called upon for assistance in the work of teaching in the University or for other work; but in no case will they be expected or permitted to devote more than one sixth of their time to such service.
In addition, one Graduate Scholarship, yielding a sum sufficient to cover the annual tuition fees, is awarded to the best student in economics just graduated from the Senior Colleges; and a similar Scholarship is given to the student graduating from the Junior Colleges who passes the best examination at a special test.
CANDIDACY FOR HIGHER DEGREES.
Graduate courses are provided for training and research in subjects such as wages, money, agriculture, socialism, industrial combinations, statistics, demography, finance, and the like. Specialization may be carried on in many parts of the field, under special direction in the Seminar, whereby each student receives a personal appointment for one hour a week. The work is so adjusted as to form an organized scheme leading by regular stages to productive results suitable for publication.
Candidates for the degree of A.M. will not be permitted to offer elementary courses in Political Economy as part of the work during the year’s residence. The work of students taking Political Economy as a secondary subject for the degree of A.M., should include (1) the general principles of economics (as contained in Courses 1 and 2, or an equivalent); (2) the history of Political Economy; and (3) the scope and method of Political Economy.
The work of candidates for the degree of Ph.D., taking Political Economy as a secondary subject, should include, in addition to the above requirements for the degree of A.M., on (1) Public Finance, and (2) on some descriptive subject as, e.g., Money, or Tariff, or Railways, etc.; and the examination will be more searching than that for the degree of A.M.
In all cases candidates should consult early with the heads of the departments within which their Major and Minor subjects are taken.
Before being admitted to candidacy for the degree of Doctor of Philosophy, in case Political Economy is chosen as the principal subject, the student must furnish satisfactory evidence to the head of the department that he has been well prepared in the following courses (or their equivalents at other institutions): History of Europe in the Seventeenth and Eighteenth Centuries (History 11); Europe in the Nineteenth Century (History 12); Later Constitutional Period of the United States; the Civil War and the Reconstruction (History 18); Comparative National Government (Political Science 11); Federal Constitutional Law of the United States (Political Science 21); Elements of International Law (Political Science 41); and Introduction to Sociology (Sociology 72).
PUBLICATIONS
As a means of communication between investigators and the public, the University issues quarterly the Journal of Political Economy, the first number of which appeared in December of 1892. Contributions to its pages will be welcomed from writers outside as well as inside the University the aim being not only to give investigators a place of record for their researches, but also to further in every possible way the interests of economic study throughout the country. The Journal will aim to lay more stress than existing journals upon articles dealing with practical economic questions. The editors will welcome articles from writers of all shades of economic opinion, reserving only the privilege of deciding as to merit and timeliness.
Longer investigations, translations of important books needed for American students, reprints of scarce works, and collections of materials will appear in bound volumes in a series of Economic Studies of the University of Chicago, of which the following have already been issued:
No. I. The Science of Finance, by Gustav Cohn. Translated by Dr. T. B. Veblen, 1895, 8vo, pp. xi+800. Price, $3.50.
In the suite of class-rooms occupied by the department will be found the Economic Library. Its selection has been made with great care, in order to furnish not only the books needed for the work of instruction in the various courses, but especially collections of materials for the study of economic problems. The University Library contains an unusually complete set of United States Documents, beginning with the First Congress. It is believed that ample provision has thus been made for the work of serious research. The work of the students will necessarily be largely carried on in the Economic Library where will also be found the past as well as the current numbers of all the European and American economic journals.
The combined library facilities of Chicago are exceptional. The Public Library, maintained by a large city tax, the Newberry Library, and the Crerar Library, with a fund of several millions of dollars, which has provided books on Political Economy, will enable the student to obtain material needed in the prosecution of detailed investigation.
SPECIAL ADVANTAGES.
For the convenience of those who wish to know the branches of economics in which especial advantages are offered by the department, attention is called to the new facilities afforded for specialization in several directions:
RAILWAYS.
Apart from the fundamental training in the general economic field, a new and exceptional series of advanced courses in the economic side of railways has been provided. It is believed that no such extended and useful courses have ever been offered before on this subject. Beginning with the usual general course on railway transportation, four new courses are presented for advanced students.
LABOR AND CAPITAL.
In view of the pressing importance of questions touching upon the rewards of labor and capital, an exceptional arrangement of courses dealing both with the underlying principles and the practical movements of the day have been prepared upon new and extended lines.
MONEY.
Opportunities for specialization in the field of money and banking have been offered in the past, but new courses have been organized in order to permit a more thorough study in these subjects, both theoretical and practical, than has ever been possible before.
LABORATORY FOR STATISTICAL RESEARCH WORK.
The University has equipped a laboratory for statistical research work in which students are given training in the collection and tabulation of statistical data, as well as in the scientific construction of charts, and diagrams. The object of the work is to familiarize students with practical methods employed in government bureaus, municipal, state, and federal, in the United States and in other countries, and in private agencies of sociological and economic investigation. Men are trained to enter the service of such bureaus or agencies of social betterment as statisticians, capable of undertaking any work requiring expert statistical service. The Departments of Political Economy and of Sociology co-operate in the direction of statistical investigations.
COURSES OF INSTRUCTION.
Summer Quarter, 1904—Spring Quarter, 1905.
M=Minor course a single course for six weeks.
Mj=Major course=a single course for twelve weeks
GENERAL.
The courses are classified as follows:
Group 1, Introductory and Commercial: Courses 1, 2, 3, 4, 5, 6.
Group II, Advanced Business Courses: Courses 7, 8, 9, 10, 11, 12.
Group III, General Economic Field: Courses 20, 21, 22, 23, 24, 25, 26, 27, 29-30, 31-32.
Group IV, Labor and Capital: Courses 40, 41, 42, 43, 44, 45, 46, 47.
Group V, Money and Banking: Courses 50, 51, 52, 53, 54.
Group VI, Railways: Courses 60, 61, 62, 63, 64.
Group VII, Statistics: Courses 70, 71, 72.
Group VIII, Seminars: Courses 80, 81, 82.
Students are advised to begin the study of economics not later than the first year of their entrance into the Senior Colleges; and students of high standing, showing special aptitude for economic study, may properly take the Courses of Group I in the last year of the Junior Colleges.
For admission to the courses of Groups II and III, a prerequisite is the satisfactory completion of Courses 1 and 2 in the department, or an equivalent. Course 1 is not open to students who do not intend to continue the work of Course 2.
JUNIOR COLLEGE COURSES.
Group I. — Introductory and Commercial.
1 and 2. Principles of Political Economy. — Exposition of the laws of modern Political Economy.
Course 1.
Mj. Summer Quarter; 8:00. Assistant Professor Hill.
Mj. Autumn Quarter; 2 sections, 8:30 and 12:00. Assistant Professors Hill and Davenport.
Mj. Winter Quarter; 12:00. Assistant Professor Hill.
Course 2.
Mj. Winter Quarter; 2 sections: 8:30 and 12:00. Assistant Professors Hill and Davenport.
Mj. Spring Quarter; 12:00. Assistant Professor Davenport.
Courses 1 and 2 together are designed to give the students an acquaintance with the working principles of modern Political Economy. The general drill in the principles cannot be completed in one quarter; and the department does not wish students to elect Course 1 who do not intend to continue the work in Course 2. Descriptive and practical subjects are introduced as the principles are discussed, and the field is only half covered in Course 1. Those who do not take both 1 and 2 are not prepared to take any advanced courses.
Economic and Social History. — It is thought that the course may be of advantage to students of Political Science and History by giving them a view of the economic side of the social and political life of the past one hundred and fifty years. Special attention is devoted to the study of the economic effects of the Colonial System; the American and French Revolutions; the “industrial revolution;” the effects of invention and the new transportation upon the movement and grouping of population; the discoveries of the precious metals in North America, South America, Africa, and Australia; slavery, the Civil War, the new South, and the redistribution of industries in the United States; the progress of Great Britain since the repeal of the Corn Laws; and the recent development of German industry.
Mj. Autumn 2:00 and Spring Quarters; 12:00.
Mr. Morris.
Course 3 is required of all students in the College of Commerce and Administration.
History of Commerce. — A brief general survey of ancient medieval and modern commerce. Consideration of the articles of commerce, the market places, the trade routes, methods of transportation, and the causes which promoted and retarded the growth of commerce in the principal commercial nations.
Mj. Autumn Quarter; 12:00. Mr. Morris.
Commercial Geography. — A study of the various countries and their chief products; the effect of soil, climate, and geographical situation in determining national industries and international trade, commercial routes, seaports; the location of commercial and industrial centers; exports and imports; the character, importance, and chief sources of the principal articles of foreign trade.
Mj. Autumn Quarter; 8:30.
Mr. ———
Required of all students in the
College of Commerce and Administration.
Modern Industries. — This elementary course, requiring no previous study of economics, examines the present organization of some of the leading industries. Study is made of the internal business organization, the processes of manufacture, the effect of inventions, etc. Emphasis will be placed on the manufactures of the United States.
The class will visit a number of large industrial establishments in and near Chicago.
Mj. Autumn Quarter; 11:00.
Mr. ———
SENIOR COLLEGES AND GRADUATE COURSES.
Group II. — Advanced Business Courses.
Insurance. — This course will aim to cover those aspects of insurance important to the practical business man, and to serve at the same time as a descriptive and theoretical treatment adapted to the needs of students intending to specialize in the actuarial and legal aspect of the subject. The history and theory of insurance, the bearing of these on the different insurance relations of modern business, including accident, health, burial, suretyship, credit forms, and the like will be examined. Especial emphasis will, however, be given: (1) to Life Insurance, the various forms of organization, assessment, fraternal, stock, and mutual; the theory of rates, mortality, expense, reserve, and interest aspects; the different combinations of investment and mortality contracts, loan and surrender values, dividends, distribution periods; (2) to Fire Insurance, the various forms of business organization, the terms and conditions of the insurance contract, the different forms of hazard, and the competition and combination of rates therefor; the theory of reserves and co-insurance, and the problem of the valued policy laws; (3) the general principle of public supervision with regard to the different forms of insurance, and the wider question of public ownership.
Mj. Winter Quarter; 8:30.
Assistant Professor Davenport.
The Mathematics of Insurance. — This course presupposes some acquaintance with the descriptive aspect of insurance. The course is devoted particularly to the mathematical principles of Life Insurance. The necessary elements of the theory are selected from the theories of probability, finite differences, and interpolation. Applications are made in particular to the following problems: The examination of the different mortality tables and the basing of mortality rates thereon; the loading of expenses and reserves and the variations of premiums, as affected by the prospective earnings of investments: the computation of total reserves; the fixation of loan and surrender values of paid-up insurance, whether by life or term extension; the computation of present and deferred annuities as affected by considerations of age, life, term, endowment, joint-life, and annuity policies.
Mj. Spring Quarter; 12:00.
Mr. Epsteen.
Prerequisite: Trigonometry and College Algebra
(Mathematical Courses 1, 2 or 1, 5 or 4, 5).
See Mathematics 9.
Law of Insurance. — Insurable interest in various kinds of insurance and when it must exist; beneficiaries; the amounts recoverable and valued policies; representations; warranties; waiver and powers of agents; interpretation of phrases in policies; assignment of insurance.
Accounting. — The interpretation of accounts viewed with regard to the needs of the business manager rather than those of the accountant: the formation and meaning of the balance sheet; the profit and loss statement and its relation to the balance sheet; the capital accounts, surplus, reserve, sinking funds; reserve funds, their use and misuse; depreciation accounts; other accounts appearing on credit side; assets; methods of valuation; confusing of assets and expenses; capital expenditures and operating expenses; capital assets, cash, and other reserves.
Prerequisite: The Course in Bookkeeping offered by the Department of Mathematics.
Mj. Winter Quarter; 11:00.
Mr. ———.
Special Problems in Accounting.
Bank accounting.
The duties of an auditor; methods of procedure; practice; problems frequently met.
Appraisal and Depreciation.
Railway Accounting. A consideration of the principal features. Determination of the four main divisions of expense. The relation between capital expenditures and profit and loss.
The Public Accountant. Legal regulations; duties and methods; constructive work in devising system of accounting to fit special needs. Practice in comparison of various systems. The advantages of various devices, loose-leaf and card systems; voucher system; cost keeping.
Mj. Spring Quarter.
Conducted by experts from Chicago institutions.
Modern Business Methods. Corporation Finance. — Speculation, investment, exchange. The course aims to make clear to the student the meaning of the commercial and financial columns of current journals and to examine the economic significance of the business transactions thus reported. Attention is given among other things to the reports of the money market, the business on stock and produce exchanges, market quotations, the various forms of investment securities, and foreign exchange.
Summer Quarter; 11:30.
Mj. Spring Quarter; 9:30.
Professor Clow.
Group III — General Economic Field.
History of Political Economy. — Lectures, Reading, and Reports. This course treats of the development of Political Economy as a systematic body of doctrine; of the formation of economic conceptions and principles, policies, and systems. The subject will be so treated as to show the continuity and systematic character of Political Economy as an intelligent explanation of economic facts. Both the history of topics and doctrines and that of schools and leading writers will be studied. Attention will be given to the commercial theories of the Mercantile System, the Physiocratic School, Adam Smith and his immediate predecessors, the English writers from Adam Smith to J. S. Mill, and the European and American writers of the nineteenth century. Selection will be made of those who have had great influence, and who have made marked contributions to Political Economy. The student will be expected to read prescribed portions of the great authors bearing on cardinal principles. It is hoped that in this way he will learn to see the consistency and relations of economic theories and to use the science as a whole, and not as a mere mass of arbitrary formulæ or dicta. A special feature of the work will be a thorough study of Adam Smith and of Ricardo.
Mj. Autumn Quarter; 11:00.
Assistant Professor Veblen.
Scope and Method of Political Economy. — The course treats of the premises on which the analysis of economic problems proceeds, the range of problems usually taken up for investigation by economists, the methods of procedure adopted in their solution, the character of the solutions sought or arrived at, the relations of Political Economy to the other Moral Sciences, as well as to the influence of the political, social, and industrial situation in determining the scope and aim of economic investigation. Special attention is given to writers on method, as Mill, Cairnes, Keynes, Roscher, Schmoller, Menger.
Mj. Winter Quarter; 11:00.
Assistant Professor Veblen.
Finance. — In this course it is intended to make a comprehensive survey of the whole field of public finance. The treatment is both theoretical and practical, and the method of presentation historical as well as systematic. Most emphasis is placed upon the study of taxation, although public expenditures, public debts, and financial administration are carefully studied.
Mj. Spring Quarter; 8:30.
Assistant Professor Davenport.
Tariffs, Reciprocity, and Shipping. — The course of legislation and the development of our commercial policy is followed, and an effort made to indicate the influence of our protective tariffs upon the development of our domestic industries, upon the growth and character of our international trade, and incidentally upon the occurrence of industrial crises and the continuance of industrial prosperity at different periods in our history. Foreign trade policies and schemes for imperial tariff federation are taken up, and especial attention given to the negotiation of reciprocity treaties, as well as to recent attempts which have been made through federal legislation granting subsidies to build up American shipping.
Mj. Spring Quarter; 11:00.
Assistant Professor Cummings.
Financial History of the United States. — In this course the financial history of the United States is followed from the organization of our national system in 1789 to the close of the Spanish war. The following topics may be mentioned as indicating the scope of the course; the funding and management of the Revolutionary and other war debts; the First and Second United States Banks; the Independent Treasury; the present national banking system; Civil War financiering with especial reference to bond and note issues, and resort to legal tender currency; the demonetization of silver and issue of silver certificates; inflation of the currency and the gold reserve; the currency act of 1900. This study of the course of legislation upon currency, debts, and banking in the United States is based upon first-hand examination of sources, and students are expected to do original research work.
Summer Quarter; 8:00.
Mj. Autumn Quarter; 9:30.
Assistant Professor Cummings.
Economic Factors in Civilization. — The course is intended to present a genetic account of the modern economic system by a study of its beginnings and the phases of development through which the present situation has been reached. To this end it undertakes a survey of the growth of culture as affected by economic motives and conditions. With this in view, such phenomena as the Teutonic invasion of Europe, the Feudal system, the rise of commerce, the organization of trade and industry, the history of the condition of laborers, processes of production, and changes in consumption, will be treated.
Mj. Spring Quarter; 11:00.
Assistant Professor Veblen.
Problems of American Agriculture. — Special attention will be given to the extension and changes of the cultivated area of the United States; the methods of farming; the influence of railways and population, and of cheapened transportation; the fall in value of Eastern farm lands; movements of prices of agricultural products; European markets; competition of other countries; intensive farming; diminishing returns; farm mortgages; and the comparison of American with European systems of culture.
Summer Quarter; 10:30.
Mj. Winter Quarter; 9:30.
Assistant Professor Hill.
Colonial Economics. — The economics of colonial administration, including some account of commercialism, past and present, and of modern trade theories of imperial federation, trade relations, financial policies, and economic development and dependence of colonies.
A brief historical account of American and foreign experience serves as introduction to a fuller consideration of economic problems involved in modern colonial administration. In the light of this experience study is undertaken of some economic problems which have arisen in Cuba, Porto Rico, Hawaii, and the Philippine Islands.
2M. Autumn and Winter Quarters; Mon., 3:00-6:00.
Assistant Professor Hill, Mr. Chandler, and Mr. Gorsuch.
31, 32. Argumentation. — To be taken in connection with English 9.
2 hrs. a week.
2M. Autumn and Winter Quarters; Wed., 3:00.
2M. Autumn and Winter Quarters.
Mr. Chandler.
Group IV. — Labor and Capital.
Theory of Value. — After a brief preliminary survey of the discussions prior to Adam Smith, the cost of production-theory as developed at the hands of Ricardo, McCulloch, James Mill, Senior, J. S. Mill, and Cairnes is taken up for detailed study. Then the utility theory of value, as presented by Jevons and Austrian economists, is examined. Finally, the attempts made by such writers as Marshall, Dietzel, Pantaleoni, Clark, Patten, McFarlane, Hobson, etc., to frame a more satisfactory theory of value by combining the analysis of cost and of marginal utility, are reviewed.
Mj. Autumn Quarter; 8: 30.
Assistant Professor Davenport.
Labor and Capital. — Unsettled problems of distribution. The more abstruse questions of distribution will be considered. No student, therefore, can undertake the work of this course with profit who has not already become familiar with the fundamental principles. The course is open only to those who have passed satisfactorily Course 2, or who can clearly show that they have had an equivalent training. The subjects to be considered will be as follows: The wages-fund and other theories of wages, the interest problem, managers’ profits, and allied topics. The discussion will be based upon selected passages of important writers. The study of wages, for example, will include reading from Adam Smith, Ricardo, J. S. Mill, Longe, Thornton, Cairnes, F. A. Walker, Marshall, George, Böhm-Bawerk, Hobson, J. B. Clark, and others. Students will also be expected to discuss recent important contributions to these subjects in current books or journals.
Mj. Winter Quarter; 12:00.
Professor Laughlin.
Economics of Workingmen. — Continuing the study of distribution (Course 41), examination is here undertaken of social movements for improving the condition of labor, to determine how far they are consistent with economic teaching, and likely in fact to facilitate or to retard economic betterment of workingmen. Efforts to increase earnings through modification of the wages system itself, resort to legislation, and the purposes and practices of labor organization are discussed, and the effect upon labor efficiency, earning capacity and steadiness of employment, of modern industrial systems; workingmen’s insurance; co-operation; profit-sharing; competition of women and children; industrial education; social-settlement work; consumers’ leagues. Interest centers about practical efforts for economic amelioration of employment conditions in “sweated” and in other industries. These studies are supplemented by statistical data on the condition of labor in different countries.
Mj. Winter Quarter; 9:30.
Assistant Professor Cummings.
Note. — Although open in certain cases to students of Sociology and others who have had the equivalent of the economic Courses 1 and 2, this course can be taken to best advantage by those only who have already had Course 41.
Socialism — A history of the growth of socialistic sentiment and opinion as shown in the socialistic movements of the nineteenth century, and the position occupied by socialistic organizations of the present time. The course is in part historical and descriptive, in part theoretical and critical. The programmes and platforms of various socialistic organizations are examined and compared, and the theories of leading socialists are taken up in detail. Marx is given the chief share of attention, but other theoretical writers, such as Rodbertus, Kautsky, Bernstein, are also reviewed. The factors which at the present time further or hinder the spread of socialism, and what are its chances of being carried through or of producing a serious effect upon the institutions of modern countries, are considered.
Mj. Spring Quarter; 9:30.
Assistant Professor Veblen.
Organization of BusinessEnterprise—Trusts. — A discussion of the growth of the conditions which have made large business coalitions possible, the motives which have led to their formation, the conditions requisite to their successful operation, the character and extent of the advantages to be derived from them, the drawbacks and dangers which may be involved in their further growth, the chances of governmental guidance or limitation of their formation and of the exercise of their power, the feasible policy and methods that may be pursued in dealing with the trusts. The work of the course is in large part investigation of special subjects, with lectures and assigned reading.
Mj. Autumn Quarter; 9:30.
Assistant Professor Veblen.
Trades Unions and the Labor Movement — An historical and comparative study of the trades union movement in the United States and in foreign countries. Negotiation and maintenance of wage-compacts; methods of arbitration, conciliation and adjustment; trades union insurance and provision for the unemployed; incorporation and employés’ liability; the precipitation and conduct of strikes; and in general all concrete issues involved in the organization of labor for collective bargaining with employers, with especial reference to the working programs of the more important trades unions at the present time.
Summer Quarter; 9:00.
Mj. Spring Quarter; 12:00.
Assistant Professor Cummings.
The Industrial Revolution and Labor Legislation. — The social consequences to the wage-earner of the development of the factory system of industry and of industrial development, more particularly during the last half of the 19th century, are taken up historically and descriptively. The social status of the modern wage-earner is contrasted with that of the handicraftsman working under more primitive conditions, and especial attention is given to the development of the modern wages system of remuneration, the historical modification of the labor contract in its legal aspects, and, finally, to the course of labor legislation which has in different countries accompanied industrial reorganization and development.
Mj.
Assistant Professor Cummings.
[Not to be given in 1904-5.]
Group V — Money and Banking.
Money and Practical Economics.— An examination is first made of the principles of money, whether metallic or paper; then either the subject of metallic or paper money is taken up and studied historically, chiefly in connection with the experience of the United States, as a means of putting the principles into practice. Preliminary training for investigation is combined in this course, with the acquisition of desirable statistical information on practical questions of the day. The student is instructed in the bibliography of the subject, taught how to collect his data, and expected to weigh carefully the evidence on both sides of a mooted question. The work of writing theses is so adjusted that it corresponds to the work of other courses counting for the same number of hours.
Mj. Autumn Quarter; 12:00.
Professor Laughlin.
The Theory and History of Banking. — A study is made of the banking systems of leading nations; the relations of the banks to the public; their influence on speculation; and the relative advantages of national banks, state banks, trust companies, and savings banks.
Mj. Winter Quarter; 8:30.
Mr. ———.
Advanced Course in Money. — After having been drilled in the general principles of money (Course 50) the student is given an opportunity to examine the more difficult problems of money and credit.
Mj. Spring Quarter.
Professor Laughlin.
[Not given in 1904-5.1
Practical Banking. — The internal organization and administration of a bank; the granting of loans; the valuation of an account; bank records; arithmetic of bank operations; mechanical and other time-saving devices.
Mj. Spring Quarter; 8:30.
Mr. ———.
Commercial Crises. — A practical study of the operations of credit in the experiences of this and other countries during the periods of crises.
Mj. Spring Quarter.
Mr. ———.
[Not given in 1901-5.]
Group VI — Railways.
Railway Transportation. — The economic, financial, and social influences arising from the growth of modern railway transportation, especially as concerns the United States, will be discussed. An account of the means of transportation developed in Europe and America during the early part of this century; the experiments of the states in constructing and operating canals and railways; national, state, and municipal aid to private companies; the rapid and irregular extension of the United States railway system; the failures of 1893; the reorganizations and consolidations since that time, with some attention to railway building in other countries, will form the historical part of the work. A discussion of competition, combination, discrimination, investments, speculation, abuse of fiduciary powers; state legislation and commissions, and the Inter-State Commerce Act, with decisions under it; and the various relations of the state, the public, the investors, the managers and the employés, will form the most important part of the work. This course gives a general view of the subject. Students who wish to continue the work by investigating special problems will have an opportunity to do so under Courses 61 and 62.
Mj. Autumn Quarter; 2:00
Assistant Professor Hill.
The Regulation of Railway Rates. — The efforts of the railways of the United States to regulate railway rates through pools, will be compared with the efforts of the several states, and of the federal government, to regulate rates through legislation and through commissions. Typical decisions of pools, of state commissions, and of the Interstate Commerce Commission, will be studied for the purpose of ascertaining: (a) whether the decisions of the commissions are founded on a body of principles that may be said to have the character of a science, or, whether they express merely the judgment of administrative officers on questions of fact to which no body of scientific principles can be made to apply; (b) whether the past experience warrants the faith that the public regulation of railway rates will leave the railways sufficiently unhampered to develop trade and industry; (c) whether regulation by public authority promises to achieve more substantial justice than regulation by pools. The experience of Germany, France, Austria-Hungary, and Russia with the public regulation of railway rates — exercised either by legislation or by public ownership — will be studied with reference to the effect of such regulation upon the elasticity of railway rates, and upon the ability of the railways to develop trade and industry. In this connection will be studied the part played respectively by the railways and by the waterways in the development of Germany, France, Austria-Hungary, and Russia. The study will show why the countries in question are obliged to have recourse to the waterways for services that, in the United States, are rendered by the railways.
Mj. Winter Quarter; 2:00.
Assistant Professor Meyer.
Industrial Activities of the State in Europe. — This course reviews the efforts made in Great Britain to secure to the public a share in the profits to be made in those so-called public service industries that use the streets: water, gas, electric light, street-railways, and hydraulic power, or compressed air, power transmission. These efforts consist of the imposition of severe restrictions upon franchises, with the alternative of municipal ownership. The experience of Great Britain will be compared with that of the United States, under: (a) the practice of practically no restrictions upon the industries in question; (b) the Massachusetts practice of regulation by legislation which is enforced and supplemented by state commissions. As for Continental Europe, the course will cover the experience of Prussia, France, and Russia, in attempting to make the railway and public works budgets fit into the state budget. In this connection the inelasticity of state activity in Europe will be compared with the elasticity of private activity in the United States.
Mj. Winter Quarter; 3:00.
Assistant Professor Meyer.
The Industrial Activities of the State in Australasia. — This course will cover the Australasian experience of the last forty years under a wide extension of the functions of the state. Although Australasia is a comparatively small country, the experience in question is more significant than might appear at first sight, for it is the experience of a homogeneous, English-speaking people. The course will cover the management of the state-railways; the administration of the public finances; the civil service; and the legislative regulation of the conditions of labor, such as the fixing of minimum wages, and the establishment of compulsory arbitration. Incidentally comparisons will be made with certain conditions and practices in Great Britain and France, for the purpose of showing how the extension of the functions of the state has made the politics of Australasia resemble, in many vital respects, the politics of France, rather than those of Great Britain.
Mj. Spring Quarter; 2:00.
Assistant Professor Meyer.
American Competition in Europe since 1873. — This course is a study in economics and politics; it purposes to put before the student information equipping him for the critical consideration of the merits of the question: Laissez faire vs. state intervention. To that end it institutes a series of comparisons between the United States and Europe, especially in the fields of agricultural practice and railway transportation. The course begins with the consideration of the nature of the competition to which the opening of new sources of supply of food products exposed Western Europe, the nature of the adjustments demanded by the situation, and the adjustments actually achieved, under free-trade in Great Britain, and under protection on the Continent. The course then proceeds to contrast the comparative failure to develop the agricultural resources of Eastern Europe (the Danubian Provinces and Russia) and Siberia with the rapid development of the agricultural resources of the interior regions of the United States. In this connection will be studied the comparative efficiency of the railway systems of Europe and the United States, with especial reference to the effect of the public regulation of railway rates, either through state-ownership, or through legislative and administrative intervention. Incidental to the main investigation an array of facts will be presented bearing upon questions of economic theory: the growth of population and the raising of the standard of living; some of the principal factors that have determined the present scale of real wages in the several European countries; some instances of the working of natural selection; and the relative merits of large farms and small farms, or of extensive cultivation and intensive cultivation.
Mj. Spring Quarter; 3:00.
Assistant Professor Meyer.
Group VII — Statistics.
Training Course in Statistics. — The object of this course is to train students in the practical use of statistical methods of investigation. Stress is laid upon work done by students themselves in collecting, tabulating, interpreting, and presenting statistics of different orders. Members of the class are also required to make close critical examinations of various publications of statistical nature with a view to determining the accuracy of data and the legitimacy of inferences drawn. Students engaged in any special work of investigation are encouraged to deal mainly with data relevant to their subjects. To others special topics are assigned. It is hoped that the course may prove useful to all students whose work, in whatever department it may lie, whether in history, sociology, or in other fields of study, is susceptible of statistical treatment.
Courses 70 and 72 will be given in alternate years.
Mj. Autumn Quarter; 8:30.
Assistant Professor Cummings.
Statistics of Wages in the Nineteenth Century. — In this course effort is made to determine what has been the actual movement of wages during the nineteenth century. An examination is undertaken of the more important statistical investigations of wage movements which have been made from time to time by economists, government bureaus, or other agencies, in specific industries; the object being to determine the extent to which the wage-earner has in general participated in the benefits of industrial progress and of the increased economic efficiency of labor and capital. The course is intended to be informational and descriptive in character, as well as to give training in the collection and tabulation of statistical data.
Mj. Winter Quarter; 12:00.
Assistant Professor Cummings.
Demography. — Statistical methods are illustrated by studies in population data, comprising the construction of actuarial tables; determination of the economic value of populations; economic aspects of the data of criminality and pauperism; growth and migration of population in the United States as “labor force,” including statistics of the negro race. The development of official statistics of population, and the demographic work of government bureaus is taken up historically and critically. The object of the course is to give students training in handling population data as a basis of sociological and economic speculation, and to point out the bearing of such data and their importance in the historical development of economic theories.
Assistant Professor Cummings.
[Not to be given in 1904-5.]
Group VIII — The Seminars.
80, 81. Economic Seminar.
2Mj. Autumn and Winter Quarters.
Professor Laughlin.
Source: University of Chicago. Programme of the Departments of Political Economy, Political Science, History, Sociology and Anthropology, 1904-1905. Chicago: The University of Chicago Press, 1904. Transcription from a copy found in the Harvard University Archives, Division of History, Government, and Economics. Ph.D. exams and records of candidates, study plans, lists, etc. pre-1911-1942. Box 2, Unlabeled Folder.
Image Source:Technology Reading Room 2, Crerar Library (Marshall Field Annex). From the University of Chicago Photographic Archive, apf2-01949, Hanna Holborn Gray Special Collections Research Center, University of Chicago Library.
Future generations of economics graduate students and junior faculty, having been raised in a world of TikTok and able to bring the tools of sound and image processing to their media productions, will probably find the following sixty-some year old Chicago economics skit dull reading. Even the curator of Economics in the Rear-view Mirror, a veteran of this art-form from M.I.T. in the mid-1970s [cf. Analysis in Wonderland, Wizard of E-52-383c, Casablank], finds this Chicago artifact in need of a major revise-and-resubmit. But we transcribe our artifacts as we find them, with minor editorial revisions to improve formatting, corrections for obvious misspellings, and annotations that have become necessary due to the passage of time. Material in square brackets (in italics) have been added to the transcription.
1929. Born 20 November in New York City.
1951. B.A. Queens College, City University of New York. Phi Beta Kappa.
1955. M.A. University of Chicago.
1957-59. Statistical analyst, Federal Reserve Bank of Chicago.
1959-71. Research Economist, University of Chicago (research assistant to George Stigler).
1933. Born 13 March in Bend Oregon.
1954. A.B. Harvard University.
1955. M.A. University of Chicago.
1962. Ph.D. University of Chicago. Thesis: The Demand for Alcoholic Beverages.
1957-61. Defense policy analyst at RAND.
1962-64. Director of special studies in the Office of the Secretary of Defense.
1964-70. Director of Program Analysis Division at the Institute for Defense Analyses.
1970-1972. Assistant director for evaluation of the Office of Management and Budget.
1972-75. Professor of economics at the University of California, Berkeley.
1975-80. Chief economist of Ford Motor Company.
1980-81. Professor in the Graduate School of Management, UCLA
1981-85. Member of the Council of Economic Advisers.
1985-2008. Chairman of the board of directors, Cato Institute.
2008-11. Chairman emeritus, Cato Institute.
2011. Died October 26 in Washington, D.C.
See: William A. Niskanen, A Life Well Lived (Cato Institute, 2012). Above screen-shot is from that memorial presentation.
1929. Born July 1 in Los Angeles, CA.
1952. B.S. UCLA.
1954. M.A. UCLA.
1958-62. Research Economist, Northwestern University.
1961. Ph.D. University of Chicago. Thesis: Labor as a Quasi-Fixed Factor of Production.
1962-67. University of Washington
1967-. Professor, Graduate School of Management, University of Rochester.
1993. Elected a Fellow of the American Academy of Arts and Sciences.
1995. Named Distinguished Fellow of the American Economic Association.
2000. Received the Secretary of Defense Medal for Outstanding Public Service.
2013. Died December 24 in Brighton, N.Y.
Image Source: University of California Los Angeles. Yearbook Southern Campus, 1952, p. 176.
true false or uncertain
[Note: a good chunk of the canonical prelim exam at Chicago featured questions having this format: example ]
Ficticious characters are in this scene
They bear no resemblance to Human bein’s.
Let the liquor flow
get on with the show,
Don’t let the faculty get out the door
They want to go home
to their little babes
To see if they’ve finished
with the prelim. grades.
_____________________
BRAVE OLD WORLD
A Tragic Comedy in Three Acts by the Adam Smithsonian Players.
by Clare [sic] E. Friedland, William A. Niskanen,
& Walter Y. Oi
Cast of Characters:
Julius Freemarket [Milton Friedman]: Popular leader of Marshallia and Head of the Ministry of Money.
Capt. Marc Caganthony [Phillip Cagan]: Freemarket’s first lieutenant and pilot of the plane.
Llaius Mysticus: [The initials happen to match Lloyd Metzler. The double “Ll” is the give-away.] A soothsayer, and prophet of things to come.
Gregaryous Wrecker [Gary Becker]: A dope peddler.
A. Sovereign Consumer [Representative Graduate Student]: Exerciser of the right of free choice and beneficiary of the fruits of capitalism.
Carlos Cassius [Perhaps a reference to Carl F. Christ?]: Proprietor of the “Do it Yourself, Ph.D. Components” shop. A leading citizen of the community.
H. Greggo Brutus [H. Gregg Lewis]: Seller of Ph.D.’s New and Used, also a leading member of the business community.
G. Dale Jolly [D. Gale Johnson]: The Key Resource Person of the Ministry of Money.
Sancho Humbugger: Former brainchild of the Chicagocrats. [probably played by Marto A. Ballesteros, Chicago Ph.D. 1957].
Act I: Bliss
Narrator: The scene takes place in the brave old world of 1894 — or some permutation thereof.
If this scene seems utopian, a slight word of explanation may be in order.
In an attempt to conform to the justice and impartiality of the marketplace, a new electoral system has been inaugurated, according to which one dollar equals one vote. Thus, the Chicagocrats (with the aid of John D. [Rockefeller] & sundry other foundations) have become the majority party and a new regime has been established based upon the principle of free enterprise, in which Julius Freemarket has become the popular leader of the entire stationary state of Marshallia. All artificial market restrictions and evidences of paternalism, such as child labor laws, pure food and drug acts and compulsory sewage disposal, have been abolished; and in response to price incentives of the purest kind, we find many new industries flourishing in the marketplace.
The scene opens as we find Julius Freemarket, together with his trusted lieutenant Marc Caganthony, taking their morning constitutional — as all important people must — observing the well oiled functioning of the competitive mechanism.
_______________
Enter Freemarket and Caganthony
_______________
Free: Isn’t it wonderful that all is in static equilibrium?
Cagant: Yes, it certainly is.
Free: Except, of course, those things which are in moving equilibrium.
Cagant: Yes, of course.
_______________
Enter soothsayer, Llaius Mysticus
_______________
Llaius: Julius! Julius!
Free: Ha! Who calls? I hear a tongue shriller than all music calling “Julius!”. Speak, Freemarket is turned to hear.
_______________
Llaius comes up to Freemarket and tugs at sleeve.
_______________
Llaius: Beware the Ides of March.
_______________
Freemarket, turning to Caganthony
_______________
Free: What man is that?
Cagant: A soothsayer bids you beware the Ides of March.
Free: It is only Llaius Mysticus. He is a dreamer, a dreary prophet of gloom and doom. He has no empirical basis for his prophesies. Let us leave him and visit with Gregaryous Wrecker.
_______________
Enter Gregaryous Wrecker, singing “I’m an Old Dope Peddler”
[Tom Lehrer song (1953), Lyrics, Performance] Upon completion of song, enter A. Sovereign Consumer (coded “Cons.”)
_______________
Cons.: (in hushed tone) Psst,…psst…hey buddy.
Free: Don’t be bashful young man. Just step right up there and tell the gentleman what you want. There’s nothing to be afraid of now. The dollar’s almighty.
Wreck: Current price is one dollar,… but March futures are fifty cents.
Cons.: Yeah? So high?
Wreck: Well, you see, the idea is this. We’ve got the phenonmener [sic] that the stuff has become a teenage fad, ever since the kids found out Alvis Regs-ley [Elvis Presley] is a user.
[Almost the same word “phenomener” appears in the Tom Lehrer song “Don’t Major in Physics”. Lyrics, Backstory.
…More often a king weds a commoner Than a physicist makes a housewife, For they only are versed in phenomener That have nothing to do with real life.
….
I like physics and my girl does not. I tried showing her my apparatus, But a blank smile was all that I got. She asked me why I was in Physics, And advised me to transfer to Ec, And whenever I tried to talk Physics, All she wanted to do was to neck! ]
Cons.: You got anything cheaper?
Wreck: Well, advertised brands, like Tiajuana Marijuana sell for a few cents more than cheaper substitutes, but they’re worth it for the prestige.
Cons.: Prestige hell! I’ll have plenty of that when I get my Ph.D. Give me the cheap one.
_______________
Exit, Gregaryous Wrecker, as A. Sovereign Consumer moves from that booth to the booth of Carlos Cassius who is found on the telephone.
_______________
Cass.: “Do it Yourself, Ph.D. Components”, … Carlos Cassius speaking. Well, I’ve got simple and multiple regressions, higher r-squares are a bit more expensive. I’ve got a sale on permanent and transitory variables (in an aside to audience) I stole these out of Speedy Read’s [“speed reading” is implicit, one may suppose. The gendered pronoun makes it clear that Margaret Reid was being referred to] wastebasket when she wasn’t looking——— Oh! You’re at Haskell High. [Perhaps a reference to “Haskell Hall”?] Well then, I’ve got some spurious correlations here, ——— very cheap———I lose money on every one of these, but I make it up in the volume. … No, we can’t guaranty that you’ll pass your thesis seminar with these. (pause) Alright, thank you very much for calling. (turns to consumer). What can I do for you?
Cons.: Wow! I see you got a new jomping [sic] point. I’ll take it.
Cass.: Well, that ought to just about complete your set.
_______________
A. Sovereign Consumer moves away from Cassius’s desk to that of H. Greggo Brutus, who is found on the telephone.
_______________
Brutus: This is Greggo Brutus speaking … “Labor Exchange, Ph.D.’s new and used”.
Well, I’ve got a Ph.D. in physics for $2,000, and one in economics from Cambridge for $3,000. (pause) What? … you’ve got only $350? Well, the best I can do for you then, is a Masters degree in planning. (pause) Very fine, I’ll have Mrs. Jones send it out to you first thing in the morning.
(in an aside to audience) Great Jupiter! Here comes another one of those Israelis. Every time I sell one of them a degree, I begin to worry about my job. [Possibly a reference to Zvi Griliches (Ph.D., 1957)?]
(to consumer) Good morning.
Cons.: I want to buy a Chicago Ph.D.
Brutus: I have one here that I’m selling for a customer named Frank Fright, [Frank Knight] who’s decided to give it up and go into Hindu Philosophy. It’s a little old, but I can throw in his endowed chair, and 400 of his reprints, at a price that’s a bargain for the set.
Cons.: A tie in sale? You’re nothing but a reactionary. … a throwback to the old regime. (As he walks off) Heretic! Subversive! Thief!
Brutus: (reflectively) Could it be possible, that I, H. Greggo Brutus have been throwing sand into the wheels of the competitive machine? Perhaps, I have erred ——— yes he is right. Oh those Israelis, they see through everything.
From George Orwell’s dystopian novel 1984, film version (1956)
Nar: So…, life in Marshallia goes merrily on its way.
Guided by the velvet glove of the invisible iron hand and watched by Freemarket’s careful eye, consumers happily go around computing their marginal utilities, and entrepreneurs are rocking happily in the cradle of competitive equilibrium.
Freemarket has preserved only one authority from the government of the decadent Past — the Ministry of Money. This Ministry is really quite harmless, as its activities are entirely financed out of the secular rate of growth of the money supply. As the only equipment of the Authority consists of a printing press and an airplane [by the end of the 1960s Friedman’s metaphor had morphed into one using helicopters], the costs are in any case quite meagre.
We now visit the Headquarters (and sole office) of the Ministry in a tower at Halfway Airport [“Midway” was the actual name of Chicago’s airport], to see Freemarket’s weekly meeting with his Key Resource Person, G. Dale Jolly, Time: Morning, March 1.
Free: Everything in equilibrium today as usual, Jolly?
Jolly: (Laughs) I have a catastrophe to report, sir.
Free: Catastrophe? Impossible! We’ve purged all the reactionary elements, smoothed all the frictions, removed all the controls, dissolved the rigidities, exiled all the labor organizers, and turned Harvard Yard [Note:the “competition” in Cambridge Mass was still Harvard and not M.I.T.] into a parking lot.
Jolly: It’s the price index, Freemarket; remember, you told me never to take my eyes off the price index.
Free: Of course; this is the variable we chose to stabilize as a guide to our monetary policy. (aside) See my JPE article of 1951, reprinted in my Essays in Negative Economics [reference to Friedman’s “Essays in Positive Economics” (1953)], only $5.75, at the bookstore.
Jolly: See for yourself: The Multivac [a fictional supercomputer that was to appear in over a dozen Isaac Asimov science fiction stories] shows that wholesale prices have dropped 20 points in the last week.
Free: A random-transitory-stochastic type shock, no doubt. Nothing to worry about. What is the money supply, Jolly?
Jolly: (Laughing) I think I lost the series, sir. It was either lost or stolen; in this section of Chicago you can’t be sure which.
Free: You lost the whole series?
Jolly: Not all of it. Some of the data is…
Free: (Quickly) You mean “data are”
Jolly: Data is, are, (we didn’t use such fancy language down on the farm), not all missing.
Free: This poses a serious problem. Capt. Caganthony, what do the rules state for this situation?
Cagant: (typically thumbing through phone book) Rule 412, Section A2 states that 80,000 assorted $10, $20, and $50 bills be dropped in a Latin Square design [see the Wikipedia article, probably application in statistics] over each city of over one million population.
Jolly: (Leaving) I won’t rest until I find the lost money data, sir. (Exit)
Free: Marc, the loss of that money series is quite serious, but I trust Jolly.
Let me have men about me that are fat;
Sleek-headed men and such as sleep of nights,
Blond Cassius, for example, has a lean and hungry look.
He thinks too much: such men are dangerous.
Cagant: Fear Cassius not, Freemarket, he’s not dangerous.
Free: Would he were fatter.
Such men as he be never at hear’ts [sic] ease
While they behold models better than their own.
Cagant: But the rules, the rules!
Free: Oh yes, the rules. Your watch should read 0800, Capt. Caganthony. Release the money over Chicago at exactly 0900 hours and over the other specified cities at subsequent 3-hour intervals.
Cagant: Roger, and off. (Exits, runs askew, whirring like a plane.)
_______________
Sound effects: Wagner’s Ride of the Valkyries.
_______________
Act II — Scene 2
Props: Table, chair, candle lit on table.
Nar: Let your eyes now adjust to the darkness of a cellar at the home of H. Greggo Brutus. The time, the evening of March 14.
_______________
On stage, Brutus.Enter Cassius.
_______________
Brut: How now Cassius. How goes the night?
Cass: (Shaking money from his coat) Did I go thru a tempest dropping money? This disturbed sky is not to walk in. But worst of all, paper has risen so high in price, due to this mad money-printing that I am forced to run my correlations on the backs of twenty dollar bills.
Brut: This glut of currency is slowing the chariots on the streets. Jolly reports it is smothering the crops. Who knows what adverse expectations it may cause in the marketplace.
Cass: All was prosperous until the ministry of money was moved to action. And now prices fall all the more as each new planeload of manna falls. It is as though the fundamental equation might contain some fundamental flaw.
Brut: Speak not such heresy in my house Cassius. Freemarket is a true and noble Marshallian. Did he not refuse the title of Supreme Bureaucrat when it was offered him by Cagananthony? I am certain he will be swayed from this policy when Jolly finds the lost money series and he sees the extreme to which he has gone.
Cass: Why must he sit in his airport tower and wait upon the money series? Is the error of his ways not obvious to every Marshallian who but looks about him? Brutus, think not that Freemarket is above the weaknesses of ordinary men. Did I not swim with him in the Tiber the other day and see him nearly carried away by the foam? So it is with this new power with which he seems drunk. Has not our noble sage, Frank Fright [Knight], warned us that “Power corrupts and absolute power corrupts, absolutely”? [Knight clearly was quoting Lord Acton (1889)]
Brut: There is truth in what you say. Freemarket promised us an economy free of all government interference. (Did he not condemn Adam Smith for suggesting that a state might build roads and schools and provide for the common defense?) Yet he insisted on this one ministry which would harmlessly follow a set of prescribed rules. And now he blindly follows his model and his rules, we know not where. Perhaps he has started us on the dreaded Road to Serfdom. [Homage à Hayek (1944)]
Cass: Then you are with us Brutus. I have moved already some of the noblest-minded Marshallians to undergo with me a plan. But there is none among us who is schooled in planning anymore.
Brut: Wait? …approach Sancho Humbugger, the brain-child of the Chicagocrats before Freemarket’s victory! He was suspected of deviationist tendencies and exiled to some southern outpost.
_______________
Enter Sancho, to Latin tune, wearing a huge sombrero and serape.
_______________
Sanche: Ole! (with wide sweep of hand)
Cass: Sancho! You’ve been away too long. Was it hot down there?
San: No, Chile.
Brut: Time enough later for such nonsense. Sancho, how do you happen to be in Marshallia?
San: Well, I was on this luxury airliner, see, when I starts up a conversation with this dame sitting next to me see. It seems she’s a white sox fan like me, see. (She wuz wit some slob who just made a killing selling cheap paper to the Marshallian Ministry of Money.) And she tells me how going from Professor to Bureaucrat was too much for Freemarket, and so he’s dropping this dough like mad. So I thought I’d take a hop to Marshallia and see if I could do something to help maybe.
Cass: Sancho, you must construct a plan for us to restore the price index to its former level, by any devious means, even (ugh?) Public Works, so as to stop the exercise of Freemarket’s excessive power with (Stage whisper) countervailing power.
[Clear reference to Galbraith’s American Capitalism: The Theory of Countervailing power (1952)]
Our whole way of life rests on your shoulders, Sancho.
San: You need a plan eh? I get the picture. Let’s see now.
(Paces nervously, mumbling, grabs for pencil & paper, scribbles furiously.)
I’ve got it! This is our action! We’re home!
_______________
All join in huddle.
_______________
Brut: (emerging) Do so; and let no man abide this deed but we the doers.
Act II — Scene III
Props: telephone, table, chair, sign (askew)
Nar: More men than these are disturbed on this troubled eve.
Free: (Alone, tired, slowly walking the room.)
Nor heaven, nor earth have been at peace tonight. That phone has screamed at each hour of the clock. (phone rings)
Jolly? What? The second derivative of prices is now falling? Oh, well, I’ll merely follow rule 205 next. Go bid the Multivac do present calculate and bring me its clanking opinion of success.
(picks up phone again.)
Capto Caganthony? He’s asleep? (With amazement and anger.) Give him this urgent message: “Another plane.” No, that’s all. He’ll know what to do.
Act III — Scene I
Props: Desk, chair, sign, blackboard.
Nar: The ides of March are come…but not gone. And, as we shall see, the events of the early day are false portent of the fate which for Freemarket lay.
_______________
Freemarket sits at desk, chin in hands, brooding.
Capt. Caganthony is at stage left and rear. Enter Jolly, whistling “Whistle as you work”. [From the Disney Film “Snow White and the Seven Dwarfs” (1937)]
_______________
Jolly: Tra, la, la, la, la, la, la (Whistles again.)
Free: Jolly, this is no time for glee; look, now my hair has started to fall out. [merelygratuitous bald-shaming of Friedman]
Jolly: (Laughing) But I’ve found it! Under my tractor seat cushion!
Free: My hair?
Jolly: No, that’s been gone too long. I found the lost money data.
Free: Thank Jupiter. Oh, Jolly, I could kiss you. Now all our troubles are over. Did you hear that, Marc, he’s found it. I knew I could trust you, Jolly.
Cagant: Now all our troubles are over. (In a monotone)
Free: (To Jolly) Tell me, did you put the data through the Multivac?
Jolly: Yes I did. But there are some strange results. (Laughing) Prices are still falling in all the cities on which money was dropped. But there has been a phenomenal reflation in the backward river valleys of the South and West.
Free: Are you certain?
Jolly: Yes, if my assumptions are true.
Free: That’s irrelevant. Just the facts, Jolly, just the facts. [Probably an indirect homage à Sgt. Joe Friday from the then popular radio/TV series Dragnet]
Jolly: (Laughing) Of course, Freemarket, Just the facts. There are disturbing signs that the permanent component of the income of farm laborers has increased substantially.
Free: Impossible, my book is not published yet. Those cotton pickers will be buying Ph.D.’s next. (To Cagant) Marc, are you sure you dropped the money only in large metropolitan areas?
Cagant: (Monotone) Your instructions were carried out explicitly, so help me Mints. [Friedman’s old Chicago teacher in money matters, Lloyd Mints]
Free: (To himself, disturbed) The money must have been dropped in the wrong place. Marc, when was your last eye check?
Cagant: Why, when I worked for the National Bureau.
Free: That explains it, they hire anybody. Come, Marc, sit here.
_______________
Cagant is blindfolded, turned away from blackboard toward audience.
_______________
Free: Now, as I write these symbols on the board, read them back to me. [as if reading a chart in an eye examination]
Cagant: Why? [punning on “Y” and “Why” sounding alike] I don’t know. I saw Z as in Z. I said, Zed. [perhaps just a silly rhyme “said”/“Zed”]
Free: (Calmly) Don’t repeat yourself, Marc. Let’s go over this last line again.
Cagant: M= KPZ
Free: Now, Marc, you don’t really want to go back to the National Bureau, do you? You know what these symbols are.
Cagant: You look at Y, I look at Z. Utility preferences differ, you know.
Free: (In a rage) This is a matter of doctrine, not of consumer choice!
Cagant: (Angrily) Under the new free-market system, this is a matter to be settled in the market place, not by a government decree.
_______________
Cagan [sic] stalks out agrily.
_______________
Free: (Upset) Jolly, the fundamental Truth of the Fundamental Equation has been questioned Call the Chamber of Chaos into session — I need reassurance.
Jolly: Stand firm, Freemarket these men are fallible; (in a shocked tone) they could even utter a non-sequitur! (Exit)
_______________
Enter Cassius, Brutus, and Humbugger
_______________
All except Free: Hail, Freemarket, Hail. You called for us?
Free: Yes, come in, Cassius, come in, noble Brutus. Ah, worthy Humbugger is with you. Good. Let me put our problem in my own terms.
Sancho: (Aside to Cassius and Brutus) Our cause is dead if he does.
Cass: (Quickly) No, glorious Freemarket, we know the problem and we know its cause. Pray hear friend Sancho speak for us.
San: Witness, noble Freemarket, how, with these quick strokes, if
(Writing on blackboard, allowing audience to see)
I = I*
G = G*
C = a + bY
and
Y = C+ I + G
then we’re home!
Free: Great Jupiter, is this the Keynes’ mutiny [punning Herman Wouk’s novel The Caine Mutiny (1952)]? This is heresy!
San: Heresy or no,
We have this to show,
Prices still fall in Chicago.
But in the West and South, on my advice,
Migrant workers have picked up quite a slice
Of permanent income; the rest don’t rhyme so nice.
Free: (Sharply) Doesn’t rhyme as nicely. Your grammar is abominable, Sancho.
San: By organizing unions to boost their wages,
By building dams to water their crops,
Income increased first by stages,
And then by leaps, and bounds, and hops.
Free: (in fury) Damn! Damn! Damn!
San: Yes Freemarket.
It is Dams we built this day.
And thru these public works disaster did allay.
Free: I must warn thee, Sancho.
These symbols and your reasoning
Might fire the blood of ordinary men,
And turn pre-ordinance and first decree
into the law of children.
(Sternly)
Thy model, and thyself, by decree, are banished.
Know all, Freemarket doth not wrong, nor
without cause will he be satisfied.
Cass: I, Cassius, do beg enfranchisement of Sancho’s model.
Free:
I could be well moved if I were as you.
If I could pray to move, prayers would move me.
But I am as constant as velocity
(Becoming emotional)
Of whose true fixed and resting quality
There is no variable in the literature.
Cassius, stand you with Humbugger?
_______________
Cassius walks in front of Freemarket to stand beside Sancho, and remains silent.
_______________
Free: (Disturbed)
Good Brutus, when all is said and done
Stand you with models with equations four,
Or with the Fundamental One?
_______________
Brutus silently joins Cassius and Sancho.
_______________
Et tu, Brute! Then die, Freemarket, die!
_______________
Freemarket clutches at sign, pulls it down, and collapses on table. The whole cast gathers around the table on which Freemarket lies, as an audience for the following speech:
_______________
Cagant:
Friends, Marshallians, Chicagocrats, lend me your ears.
I come to bury Freemarket, not to praise him.
The models that men build live after them,
Their meaning oft interred in their books.
So let it be with Freemarket.
All (including MAB): [almost certainly, Marto A. Ballesteros]
How many ages hence
Shall this our lofty scene be acted o’er
In states unborn and accents yet unknown.
Source: Harvard University Archives. Papers of Zvi Griliches, Box 129, Folder “Faculty skits, ca. 1960s.
Note on Marto A. Ballesteros identification for “MAB”
Fellow 1957—Asst Prof. 1960 at the University of Chicago according to the 1969 AEA Directory of Members.
Publications
Argentine Agriculture, 1908-1954: A Study in Growth and Decline By Marto A. Ballesteros (University of Chicago, 1958). (PhD thesis)
Ballesteros, Marto A. Desarrollo agrícola chileno, 1910-1955. Santiago: Pontificia Universidad Católica de Chile, Facultad de Ciencias Económicas y Sociales,1965. p. 7-40.
Newspaper Accounts
The Peninsula Times Tribune (13 Sep 1957). Marriage to Jill Sidnell Geer of Los Altos. Off to Chile to live for one year. His parents are from Madrid, his undergraduate studies were at the University of Madrid, MA and PhD at the University of Chicago. Just received his doctorate in economics from the University of Chicago, Junior fellow at the Center for Advanced Study in the Behavioral Sciences for a year 1956-57.
The Galion Inquirer (23 Sep 1957) that “[Balesteros] will be doing research and teaching in economics at the Universidad Catolica de Chile, Centro De Investigaciones Economicas, Santiago, Chile, under sponsorship of the University of Chicago and the International Cooperation Administration of the U.S. Government”.
Miami Herald (8 Apr 1965), “Dr. Marto Ballesteros, chief of the Pan American Union’s public finance unit”.
Happy to add another round of first quarter price theory exams from the University of Chicago to the collection.Always nice to have a picture from the early professional years of the economists featured here. Distinguished old farts were once rising stars after all. (A general wisecrack made with the qualification, “present company excluded”.)
(16 points) State whether each of the following statements about the U. S. economy is true, false, or uncertain, and explain your answers briefly.
Consumers decide what will be produced.
All consumers participate equally in determining what will be produced.
The government influences the composition of output in the private consumer goods sector.
The government determines the level of investment for the economy as a whole.
(10 points) Comment briefly on the following statement:
“When equilibrium prices in competitive markets are disturbed, they tend to be re-established. Thus the first effect of an increased supply of eggs is to lower the price. At this lower price, consumption is increased, and the increase in demand tends to drive the price back up again.”
(16 points) Increased costs cause manufacturers to reduce the size of 5 cent chocolate bars from 2-1/2 ounces to 2 ounces. Because the bars are smaller, people eat more of them and consumption rises from 10, 000 bars a week to 11,000.
Can these events be shown on an ordinary supply and demand diagram? If so, show them. If not, explain why.
Can the elasticity of demand for chocolate be computed? If so, compute it. If not, explain.
(24 Points) The following table gives hypothetical prices of pork and beef per pound in two years, and quantities consumed in a certain town.
Price per pound
Pounds consumed
1959
1960
1959
1960
Pork
40 cents
50 cents
1000
800
Beef
60 cents
60 cents
1000
1200
Compute the elasticity of demand for pork and the cross-elasticity of demand for beef in terms of the price of pork.
Compute the Laspeyres price index for the price of meat from 1959 to 1960 (assuming that pork and beef are the only kinds of meat).
Draw an indifference map for pork and beef for a typical consumer and illustrate the changes shown in the table on his indifference map. Derive two points on his demand curve for pork.
Assume that the consumer’s money income is increased by an amount equal to his original income times the Laspeyres price index computed in (b). Demonstrate that he has been overcompensated for the price rise. Under what condition if any would this increase in income fail to overcompensate him?
(16 points) Jones lives in a rented house for which he pays $150 a month. He has the opportunity of buying an identical house for $25,000, of which $15,000 will be paid in cash and $10,000 can be borrowed on a mortgage. He has figured that his monthly expenses would be $100 if he bought: $50 for interest on the mortgage, $20 for local taxes, and $30 for maintenance and depreciation. His income tax and expenses for fuel and utilities will not be affected by the purchase. He argues that it will cost him less to live if he buy the house; his wife argues that it will not.
Under what conditions is Jones right? Under what conditions is Mrs. Jones right?
Is there any divergence between the “right answer” to this problem from the private standpoint of the Jones family and from the standpoint of society? Explain.
(18 points) The GJS corporation, manufacturers of gadgets, have determined that for every 10 per cent increase in the capacity of a gadget factory, minimum short-run average total cost falls by 1 per cent throughout the relevant range of capacities.
What can you say about the production function for gadgets over the relevant range?
Suppose that the company hires two factors of production, labor and capital, and pays each its marginal product. Will anything be left over for the owners of the company who contribute no services? Explain.
Suppose that the company wants to build a plant to produce 10,000 gadget per week. What can you say about the size of the plant that will produce these most efficiently?
Economics 300
Mr. Rees
Fall. 1960
Final Examination
December 14, 1960
(21 points) Show each of the following events on an indifference map:
The change in the consumption of margarine following an increase in income (axes: butter and margarine. Assume that the income elasticity of demand is positive for butter and negative for margarine.)
The change in the consumption of bread following a rise in its price. (axes: bread and all other commodities.) Identify the income and substitution effects of the price change.
Do part (b) over using Friedman’s “Marshallian demand curve” concept and explain the difference between the diagrams for (b) and (c).
(19 points) In the United States, about one-fifth to one-fourth of all income is property income. State briefly (a) the advantages of having private income from property in our economy (b) the costs or disadvantages. You may judge these according to any values you care to use, making the values as explicit as possible.
(20 points) In a certain isolated area there are 50 farms of each of two types, A farms and B farms (100 farms in all). Within each type, all farms are identical. All farms are worked by identical workers. The marginal product schedules of one farm of each type are given below, in bushels of wheat per year.
A Farm
B Farm
No. of workers
1
100
95
2
90
84
3
80
73
4
70
62
5
60
51
If there are 260 workers in the area, how many will be employed on each kind of farm? What is the total product of each kind of farm? The rent of each kind of farm? The wages of workers on each type of farm in bushels per year? (Assume that farmers compete freely for labor, and labor can move within the area.)
By means of an irrigation project, the owners of twenty B farms transform them into A farms. Recompute the answers to (a), counting the transformed farms as A farms. Who gained and who lost from the project, and why?
(20 points) By means of appropriate diagrams and/or explanations, show the short-run effect of each of the following taxes on the output and profits of a monopolist.
An excise tax of 10 cents per unit of product.
An excise tax of 10 percent of the price of the product.
A corporate profit tax equal to 50 percent of net profits.
(20 points) The Edgeworth Box Company is the only employer in the town of Yarmouth. Its supply schedule of labor is given by W = 40 + 1/4 q, where W is the wage in cents per hour and q is the number of manhours supplied per week. The company sells boxes in a competitive market. The value of the marginal product of labor is given by
V = 100 – 1/2 q for values of q greater than zero.
How many man-hours of labor will the company employ, and at what wage?
Show diagramatically for part (a) first, the wage bill and second, the sum of monopoly profits and the return to factors of production other than labor.
What will be the effect on employment of a legal minimum wage of 60 cents an hour? of 80 cents an hour?
This problem may be solved algebraically or graphically. The following table gives numerically some points on the schedules whose equations are given above:
Supply
Marginal Product
q (Man-hours)
W (cents)
q (man-hours)
W (cents)
1
40.25
1
99.5
2
40.50
2
99.0
3
40.75
3
98.5
4
41.00
4
98.0
etc.
etc.
Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Albert Rees Papers, Box 1, Folder “Economics 300”.
