Category: Economists

Henry C. Simons composed a dozen page, double-spaced, memo that he circulated in draft form to Hayek and the Chancellor of the University of Chicago, Robert M. Hutchins in May 1945. He was afraid that socialists and Keynesians (i.e. the Cowles Commission) were getting the upper-hand and that “traditional-liberal” economists like himself were becoming an endangered species. Not trusting university governing structures, Simons hoped to established an Institute of Political Economy that would dock onto the university but remain an independent beacon of traditional-liberal economics. 

I presumed the unnamed angel in all this was the William Volker Fund, but David Levy thinks the Earhart Foundation would have been a more likely addressee, given the list of people named by Simons. I find it curious that Simons never explicitly mentions a target foundation for his proposal though he had no reservations about including a long list of names of the economists he expected to support the work of his proposed Institute of Political Economy.

Hutchins wrote back to Simons in early September 1945, “I understand from the angel that Hayek has submitted another program, which has no relation to economics.” Simons’ proposal can be considered to have been an elevator pitch for a Chicago-based pre-Mont-Pèlerin Society.

Pro-tip.

According to the University of Chicago Archive’s Guide to the Henry C. Simons Papers, 1925-1972, Box 8, Folder 9 contains Simons’ file regarding his “Institute of Political Economy” proposal. The material for this post all come from Office of the President. Hutchins Administration Records. Box 73, Folder “Economics Dept., 1943-1945”.

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Some of the Backstory

Henry C. Simons Urges his Department Chair (Simeon E. Leland) to Recruit Milton Friedman

August 20, 1945

Henry Simons’ grand strategy was to seamlessly replace the triad Lange-Knight-Mints with his own dream team of Friedman-Stigler-Hart. He feared that outsiders to the department might be tempted to appoint some convex combination of New Dealer Rexford Tugwell and trust-bustin’ George W. Stocking Sr., economists of the institutional persuasion who were swimming on the edges of the mainstream of the time.

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Cover memo from Henry Simons to Robert M. Hutchins

THE UNIVERSITY OF CHICAGO

Date: May 19, 1945

[To:] Robert M. Hutchins

[From:] Henry Simons[,] Department [of] Economics

In re Hayek project

I enclose copies of two memoranda sent to Professor Hayek and of the covering letter.

Hayek asked Friedrich Lutz, Aaron Director, and me to send him suggestions and, when possible, to discuss the matter with one another. Other copies of the enclosures have been sent to Lutz, Director, and a few local people.

When you find time to look at this stuff, you might first read the letter and Memorandum II. The other item (Memorandum I) is long, discursive, and suitable, at best, only for very restricted circulation.

[signed]
Henry Simons

______________________

Henry Simons letter to Friedrich Hayek
[Carbon copy]

May 18, 1945

Professor Friedrich Hayek
London School of Economics
The Hostel, Peterhouse
Cambridge, England

Dear Professor Hayek:

I have been struggling to formulate a worthy and promising project that might attract endowment funds. Enclosed find two memoranda which are the poor results of my efforts. Memorandum II is mainly just a condensation of I—and is perhaps better suited for strangers.

I have departed very far from the kind of project we discussed here. I cannot muster or sustain much enthusiasm for any short-term project, or for any project which aims merely at another book or series of tracts. So much good money and professional effort has been wasted on such enterprises. My guess is that one should be less diffident about proposing what one really wants—that one might get both more (and “better”) money and fare better results by projecting something which the active participants might undertake and pursue with conviction and enthusiasm. Honesty is probably the best policy, even when seeking endowment funds.

I have contrived a project largely for what one might call ulterior purposes: (1) to get Aaron Director back here and into a kind of work for which he has, as you know, real enthusiasm and superlative talents; (2) to effect an arrangement regarding visiting professors which I have long espoused. Moreover, I have deliberately formulated the kind of project for which this University would be the natural location and for which Aaron would be a natural choice as head. But I doubt if such ulterior purposes condemn the scheme; on the contrary, the best procedure probably is that of making new schemes to do old things that one has long regarded as desirable. Indeed, the new device, as regards the stream of visitors, has very special merits, for it permits a continuity in the contribution of the visitors which could hardly be achieved otherwise.

I am sorry to have organized Lutz out of the picture—and hope he might be “organized in” again from time to time or permanently. He is probably the best choice for your kind of project; but Aaron seems a better choice for mine, if only by the nature of his own preferences and interests—although Lutz, in turn, would be a better choice for my project if it were located at Princeton.

My scheme may have little or no appeal to the particular donor. I’ve gotten too intrigued with formulating a project to give attention to its saleability to any individual.

We’re still sad about having seen so little of you and about having failed to keep you on for the Summer.

Cordially,

Henry C. Simons

HCS:w
Encl. 2 [Note: only memorandum 1 is to be found in the Hutchins file]

*  *  *  *  *  *  *  *  *  *  *  *  *  *

Memorandum I on a proposed
INSTITUTE OF POLITICAL ECONOMY

It may clarify all that I have to say here if I start with confession of my personal interests and selfish purposes.

A distinctive feature of “Chicago economics,” as represented recently by Knight and Viner, is its traditional-liberal political philosophy—its emphasis on the virtues of dispersion of economic power (free markets) and of political decentralization (real federalism for large nations and for supra-national organization). With the scattering of the “Austrians” and the vastly changed complexion of economics at Cambridge and Harvard, this intellectual tradition (of Smith, Ricardo, Mill, Menger, Wieser, Sidgwick, Marshall, Pigou, Clark, Taussig, Fisher, and Fetter, and of Locke, Hume, Bentham, de Tocqueville, von Humboldt, Acton and Dicey) is now almost unrepresented among the great universities, save for Chicago; and it may not long be well represented at Chicago. It has still many firm adherents, to be sure; but its competent representatives are widely dispersed and isolated from one another, in academic departments or governmental bureaus where they are largely denied opportunity for cooperation with like-minded scholars, or for recruiting and training their successors.

There should, I submit, be at least one university in United States where this political-intellectual tradition is substantially and confidently represented—and represented not merely by individual professors but also by a small group really functioning as a social-intellectual group. This objective presents difficulties, to be sure. Universities will seek to maintain balanced representation of major schools of thought (if not every fashionable novelty), in economics as in other departments; a group of traditional liberals large enough to function effectively might either dominate unduly any single economics department or require, for adequate representation of other “schools,” a department of excessive size. Moreover, traditional labels, individualists in political ideology, tend also to be lone -wolves and excessively individualist in their social-intellectual activities. More than other economists, they must, for real group activity, be selected with regard for their individual propensities for working with one another; if not inordinately friendly and congenial as persons, they are likely to go their separate ways, instead of cooperating, even if propinquity invites a more fruitful community activity.

Consequently, I see much merit in planning for such a group—for such a small social organization of traditional-liberal economists—without total reliance on departmental or university policy and with some loosely or informally affiliated “center” or “institute.” A few traditional-liberal professors might then function both as members of university departments, representing a suitable variety of schools or ideologies and not overlarge, and also as members of a different group centering around the small “institute” or “center” and organized deliberately in terms of a political philosophy or ideology.

Such an institute (Institute for Political Economy) should have a permanent head (Mr. Aaron Director). It should offer services, especially stenographic and mimeographing, for its local group. As its main function, it should, normally in cooperation with the university and department(s), arrange and partly finance extended visits of the best economists and political philosophers of its “school” from all over the world, one or two at a time. It might arrange local lectures or seminar talks by such economists when they happen to be passing through the city. It might sponsor a small local discussion club for faculty, advanced students, and selected outsiders. It might offer a few special fellowships for advanced study—for traditional-liberal economists (teachers, bureaucrats, journalists) as we now offer them for agricultural economists. It might help finance the writing and research of a few cooperating economists not visitors here. Above all, however, it should facilitate the group activity of the interested local professors and maintain a steady flow of competent visitors. From all its activities, a better flow of publications, both scholarly and semi-popular, might be anticipated; but this result should be planned by indirection—stimulated or facilitated rather than required under contracts with participants.

The permanent head of the Institute should be a broadly competent economist, with a major interest in a political philosophy and 19^th century English political economic thought. He should be young enough to do creative work and yet mature enough to assure against his stepping out of character as a libertarian. He should be an essentially intellectual person, not a promoter, not politically ambitious or “on the make,” not “the administrator type,” not prominently identified with other organizations or public activity, and not adept at salesmanship or public relations. Indeed, the Institute should have no organized “public relations” at all, should cultivate obscurity, and, while promoting some popular writing, should seek primarily to make its influence felt in the best professional and academic circles, and merely by improving the quality of the writing (and teaching) of individuals. It should not ordinarily engage in publication or seek to identify itself in connection with the publications of its members or participants. Its head should be simply one scholar among scholars, seeking to hold together a group of individuals characterized by common political-economic persuasions, and to help them to help one another—by free interchange of ideas, mutual criticism of preliminary manuscripts, etc.

An important function of the Institute, indeed, should be that of providing typing, mimeographing, and mailing services for affiliated economists. It might facilitate organized discussion (1) of what people intend to write about, (2) of what they have prepared as tentative drafts, and (3) of what they are about ready to publish. Such discussion, besides stimulating writing, should greatly improve its quality, enabling an individual, before publishing, to thresh out disagreements with competent colleagues or, at least, to recognize what their disagreements or dissents are.

The most obvious merit of the scheme, for the University, lives in the plan of bringing in, for extended visits, the best available libertarian economists from other institutions and other countries. Such visitors might mainly or largely be younger men considered more or less eligible for regular appointment to the University faculty. In many cases, the University might be able to “look over” such men without the usual awkwardness of that process—to have them around for six or twelve months without any implied commitment to retain or even to “consider” them for permanent appointment. I should hope that the Institute would, in effect, deeply influence appointments to the faculty, merely by bringing excellent persons whom everyone, knowing them by their visit, would recognize as desirable appointees. It might also improve appointments by itself making this community more attractive to the best candidates.

The closest cooperation between the Institute and the University in the selection of visitors should be maintained. For distinguished visitors nominated by institute, the University might occasionally bear all, and often half, of the cost. For prospective appointees, the University might occasionally use the Institute as a dummy, thus getting a look at the candidate with a minimal [sic] of involvement and without risk of building up expectations that might be unpleasantly disappointed. Normally, it might be hoped that visitors would nominally divide their time between the Institute and the university, each bearing part of the cost.

I naturally would choose Chicago as a location for such an institute, and the University of Chicago as the institution with which to associate it. More substantial reasons than my personal predilections, however, could be offered for this choice. “Chicago economics” still has some distinctively traditional-liberal connotations and some prestige. Here, more than elsewhere, the project would be that of sustaining or keeping alive something not yet lost or submerged—and something which here, too, will shortly be lost unless special measures are taken.

However, I am somewhat open-minded about the location—and should myself be more than ready to go elsewhere, even at financial sacrifice, in order to participate in the kind of intellectual community in question. Likewise, I suspect that many able people might be attracted, at moderate stipends, to any good university where such a prospect was reasonably assured.

And I will concede that the outlook at Chicago, if better than elsewhere, is not very promising. Our Divisional dean has no appreciation of economic liberalism and a distinct hostility toward it, and the same is true of most persons in the other social science departments. Among higher administrative offices, there is at best only indifference, or provisional toleration, toward such political economy. A few members of the Law School and School of Business are interested or sympathetic, as are other individual faculty members here and there. In the department, moreover, we are becoming a small minority. Since I came to the University (1927), only one economist has been appointed who could be classified as really a traditional liberal (he, at an age when cure might still be anticipated); and one (the only fellow I ever found eminently useful as a colleague) was fired simply because of his uncompromising, competent profession of that political-economic philosophy. Meantime, many appointments have been made to the divisional economics staff; and a large staff, overwhelmingly hostile to economic liberalism, has been built up for the College courses in social science. Then, too, we acquired the Cowles Commission and its staff—whose influence the proposed Institute might partially neutralize or offset. Finally, there are our new agricultural economists who, while sympathetic, are real libertarians only avocationally.

Within the large department, there are now Knight, Mints, Viner, myself, and Lewis (in order of age). Knight will soon reach retirement age; Mints is not far behind; and Lewis, long frequently on leave, may well be attracted elsewhere. Moreover, Knight and Viner, while the best of libertarians, can hardly be called members of our group. Knight is increasingly preoccupied with the philosophy and philosophers, not to mention historians, theologians, anthropologists, et al., and is not deeply interested in concrete problems of economic policy. And Viner, while eminently useful to us as Journal editor, seems increasingly to dissociate himself both by interests outside economics and by very special preoccupations in his own writing and research. That leaves Mints and Simons to talk with and to stimulate one another, and to represent libertarian economics on the main teaching front—along with Lewis when he is here. (Viner and Knight teach only quite advanced courses and, even at that level, reach most of the students only in courses which stress technical matters, not political philosophy or political economy.)

On the other hand, our socialist and Keynesian colleagues are friendly and unusually tolerant toward us; and the others are not so much opposed to our political persuasions as simply uninterested—politically neutral or agnostic. It is a group which would be mainly friendly and cooperative with the Institute and its guests; it would doubtless welcome cordially most of the people whom the Institute would propose as visitors, and be happy to use the Institute occasionally for looking over possible appointees. No hostility would be likely to arise if the Institute was properly handled (for its own purposes) and if its resources were moderate.

Let me now formulate more concrete proposals.

(1) The Institute should be projected for roughly a 20-year period.

(2) It should have a permanent head (Aaron Director) with a salary of $7,500—the only person for whom the Institute would hold out permanent, full-time, professional employment.

(3) It should occupy a suite of three or four rooms at 1313 East 60^th Street—or, like the Cowles Commission, on the campus—one for the director, one for a secretary-stenographer (or two?) and one for its visiting economists.

(4) It should plan to have one visiting economist (or political scientist, if libertarian ones can be found) on the ground all the time (save for its vacation periods)—and more than one if and as joint appointments and joint financing with the University are arranged.

(5) Finances permitting, it might grant a few fellowships (of, say, $1,000-$1,500) for the advanced training (or refresher training) of persons teaching economics at other institutions, or of interested practicing bureaucrats and journalists.

(6) It might also occasionally bring in outsiders for specific projects of writing and/or research—or assist them in completing publishing work done elsewhere.

(7) It would be highly desirable to have, in addition to the permanent head, a permanent half-time economic statistician, if arrangements could be made for joint appointment, with some department or school of the University, of a suitable person (e.g., Mr. Milton Friedman).

(8) In addition to one or two stenographer-secretaries, generous budgetary provision should be made for peak-load typing and for mimeographing of the manuscripts of economists affiliated with the Institute.

(9) These tentative proposals contemplate a budget of $20,000-$40,000 per year. A start could be made with less than $20,000, and more than $40,000 could easily be utilized effectively; but I distrust munificent arrangements. The important thing financially is assurance of continuity for a considerable period; but, again, I should urge against initial provision for more than 20-25 years. All this implies endowment of $300,000-$600,000—or assurance that funds of that (initial) present value will be steadily available.

The Institute should be set up, not as part of the University of Chicago but independently, with its own governing body and its own funds. It should be located at Chicago, however, only after reasonable assurance of close and friendly relations with the University; and it should be free to move elsewhere if effective or fruitful cooperation later proves unattainable here. The University might undertake to handle Institute funds; it should extend full use of facilities like the Library to the Institute’s director and its guests; it should offer facilities for lectures and seminars sponsored by the Institute; and it should undertake, when feasible, to make temporary (and perhaps one permanent ) joint appointments, so that guests of the Institute might also commonly serve also as members of the faculty. Close administrative cooperation and consultation should be continuously maintained. Cooperation, however, should be achieved largely through individuals, rather than by formal organizational connections.

The Institute should be designed primarily to promote cooperation and communication among competent economists of a traditional-liberal persuasion. It should aim to make such economists more cohesive and more articulate as a group. Its primary concern should be that of contributing to professional discussion and publication at the highest professional level, not that of popularizing or of propagandizing at a mass level. It may be hoped that such publication of popular or semi-popular books and articles would incidentally come about; and some direct efforts to this end would be appropriate. The Institute should seek to focus attention, not only on general economic-political philosophy, but largely on real, concrete problems and issues of public policy. It should, however, adhere firmly to a long and large view of policy, seeking not to influence immediate political action but to improve the quality of discussion of immediate matters. It should largely ignore considerations of immediate political expediency, seeking by discussion to influence professional opinion and thus perhaps to determine what will much later become politically feasible.

The director might properly occupy himself considerably with projects of non-technical writing on major policy problems. He might occasionally arrange for symposium publications, or for a series of special studies, with subsequent summary publications, for a wide audience. In the main, however, the director should be simply one member like others in an academic-intellectual community, contributing his share of talks and manuscripts to the common pool for mutual stimulation and criticism. Like others, moreover, he should publish mainly as an individual.

There are presumably plenty of agencies for publishing and disseminating good popular books and tracts. The Institute might quietly call attention to such writings of libertarian economists as might appeal to other organization; and it might occasionally subsidize or “undisclosedly enterprise” good publications which fail to find other outlets. In the main, however, it should seek to promote work which, when ready for publication, will readily attract commercial publishers. Its subsidies should be largely confined to unusual manuscripts which promise important contribution to professional discussion but do not promise commercially adequate sales.

The Institute, avoiding publicity, should be frank about its purposes and about its ideological position. Its director, its governing board, and all of its consulting or affiliated economists should be chosen as ardent, confirmed free traders—as anti-collectivists, anti-syndicalists, anti-“Planners”—as advocates of free foreign and free domestic trade, of non-discriminatory commercial policies, of untied, non-governmental foreign lending, of deorganization of functional groups, of deconcentration of economic power, of decentralization in national government, of impairment of national sovereignty (through supra-national organization), of devolution of central government powers (in favor of provisional and local powers); i.e., as advocates of systematic and progressive dispersion of power, nationally and internationally. They should be proponents of rigid economy in the kinds of governmental control or intervention—yet more concerned to minimize the kinds than the aggregate amount, and more concerned about minimizing the amount in large or central governments than in local and provincial bodies. Their central credo, following Acton and de Tocqueville, should be that no large organization can be trusted with, or wisely permitted, much power. They should be zealous proponents of the rule of law, of rules of policy as against legislative nose following, and of minimal delegations of discretionary authority. In a word, they should be confirmed constitutional-federalists in the strict sense.

That such an Institute would serve its proper or original purposes cannot be assured for a long period. It can be reasonably assured for (say) twenty years only by the most careful selection of personnel. One can trust Aaron Director to serve such purposes faithfully and intelligently. One can so trust Friedrick [sic] Hayek, Jacob Viner, Frank Knight, Lloyd Mints, Gregg Lewis, Theodore Yntema, Theodore Schultz, Garfield Cox, Wilber Katz, Quincy Wright, Ronald Crane and, to mention some persons elsewhere, Friedrick [sic] Lutz, Herbert Stein, Leland Bach, George Stigler, Allan Wallis, Howard Ellis, Frank Dunston Graham, Frank A. (and Frank W.) Fetter, Harry G. Brown, Joseph Davis, Karl Brandt, Leo Wolman, William A. Paton, Clare Griffin, I. L. Sharfman, Leverett S. Lyon, Milton Friedman, Arthur F. Burns, Gottfried Haberler, Eugene Rostow, Lionel Robbins, Fredrick Bonham, Henry Clay, R. G. Hawtrey, T. E. Gregory, Arnold Plant, A. J. Baster, Colin Clark, Roland Wilson, Harold A. Innis, Carl S. Shoup, James W. Angell, Thurman Arnold, Harry D. Gideonse, Reginald Arragon, Albert G. Hart, John M. Clark and, among prominent business men, William Clayton, and, among journalists, Walter Lippman, John Davenport, and Sir Walter Layton. Many others might be named, and some of those named above could be fully trusted only as members of an otherwise well-selected company.

Aaron Director is not only the ideal person to head the Institute; he is available and would be willing to undertake the task even at financial sacrifice (which he should not be expected to make). He probably would accept the modest stipend compatible with a properly modest and unobtrusive organization. No serious problem should arise in recruiting an able and reliable governing body or a fairly sizable company of conscientious, interested economist-participants or sponsors.

The Institute, to repeat, should not be designed primarily or explicitly as an agency for preparing tracts or reports. It should not be mainly concerned with formal economic theory; neither should it engage substantially in empirical research. It should focus on central, practical problems of American economic policy and governmental structure. It should afford a center to which economist liberals everywhere may look for intellectual leadership or support. It should seek to influence affairs mainly through influencing professional opinion and by preserving at least one place where some political economists of the future may be thoroughly and competently trained along traditional-liberal lines. Money for such causes is perhaps not hard to get and is very easy to spend wastefully or harmfully. In the project here suggested, I can see little danger of miscarriage and real promise of very good results.

______________________

Memo from Merrill Mead Parvis [?] to Hutchins and Colwell

THE UNIVERSITY OF CHICAGO

Date: June 14, 1945

R.M.H. [Robert M. Hutchins]
E.C.C.  [Ernest Cadman Colwell, President of the University of Chicago from 1945 to 1951]

In re Hayek à la Simons

There is an element of fear in Mr. Simons’ presentation of the true faith in economics. It sounds very familiar to me. It weakens any enthusiasm I may have had for the Hayek project. When it is seriously suggested that the staff for the institute should be drawn from men already so old that there is no risk of any ideas entering their heads, the cause must be in precarious condition indeed. Instead of the title that Mr. Simons suggests, I would suggest “asylum for laissez faire economists.”

In the second place, it seems to me that Mr. Simons takes all the vigor out of the proposal: It should not do serious research; it should not produce books that would influence public opinion; but it should aim at being a small, social, intellectual community, effecting contacts and influencing professional opinion. There is an element of dilettantism in this whole proposal, as I read it, that makes it sound like the laissez faire economists dinner club.

The statement of its relationship to the University seems to me to be a very simple one, not altogether desirable. The institute would be a pressure and propaganda group on the edge of the University entirely outside the University’s control, organized for the purpose of forcing or leading the University to appoint orthodox economists. None of this sounds very good for the University to me.

Yours truly,
[signed]

[Guess: Merrill Mead Parvis (1906-1983), colleague of Ernest Cadman Colwell, Chicago Ph.D. 1944, appointed associate professor of New Testament at Emory. Note that Colwell left Chicago in 1951 to become vice president and dean of faculties at Emory University.]

“Colwell was a New Testament scholar of some note. A graduate of Emory University, he received his PhD from the Divinity School at Chicago in 1930. He served on the faculty of the Divinity School from 1930 to 1951. One of his most remarkable decisions was to veto the appointment of George S. Stigler in 1946 to the faculty of the Department of Economics, on the grounds that Stigler was too empirical. See Ronald Coase, “George J. Stigler,” in Edward Shils, ed., Remembering the University of Chicago: Teachers, Scientists, and Scholars (Chicago, 1991), p. 470.

Source: Ftnt. 359 in John W. Boyer The University of Chicago: A History (2015), p. 571.

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Carbon copy

Follow-up Memo from Hutchins to Simons

June 20, 1945

Dear Henry:

Thank you for the memoranda on the Hayek project. What has happened to this scheme?

Sincerely yours,

ROBERT M. HUTCHINS

Mr. Henry Simons
Department of Economics
Faculty Exchange

______________________

(Late) Reply to Hutchins by Simons

THE UNIVERSITY OF CHICAGO

Date: September 4, 1945

Chancellor R. M. Hutchins
From: Henry C. Simons [,] Economics [Department]

I am not remiss in telling you about the Hayek project, for there still is no further news. I have heard nothing from Hayek since he was here—which suggests either that he didn’t like my memos or that he has been preoccupied, possibly as a consultant on the treatment of Germany. Probably something unexpected has happened, for others have heard nothing from him; he is usually more than polite and “correct” about correspondence.

The memos and their scheme, however, were obviously not well contrived to get money from his particular “angel.” I had hopes that they just might be otherwise useful. Now that Sociology and Political Science are going into economics on their own, some scheme like mine is really needed as a counterpoise—not to mention E.H. Carr!

I’m taking the liberty of enclosing copy of a recent memo. [Not found in this file] Let’s hope it is not too irregular to do so, and that you will not be annoyed by passages which, at worst, were not intended to annoy you. Sending copy to you is an afterthought.

[signed, HCS]

HCS-w

P.S. A letter has just come from Hayek. Copy will go to you when it has been deciphered.

______________________

[Carbon copy]

Hutchins’ Reply to Simons

September 10, 1945

Dear Henry:

I understand from the angel that Hayek has submitted another program, which has no relation to economics.

What is the matter with E. H. Carr? I take few exceptions to your memorandum on Economics. My most important one is the implication that the Department is engaged in a bitter struggle with the administration to secure its just desserts. The administration would like nothing better than to make as many first-class appointments in Economics as the Department can prove are first-class.

The implication that the administration has put on pressure for “less good” appointments will prevent the administration from passing on without comment suggestions which it receives from reputable quarters. The suggestion of Stocking came from Edward H. Levi and was sent to Mr. Leland with no comments except those of Mr. Levi.

There is a kind of particularistic flavor about these suggestions for developments in connection with the Cowles Commission, the Law School, and possibly the School of Business, which imply that these are in the central field, whereas Industrial Relations, Agricultural Economics, Political Science and Planning, and possibly American Economic History are not. Some day I want you to explain to me why some of these areas are central and others are ancillary.

But what I started out to say was that I am glad that you are thinking about and pushing for the development of Economics in the University.

Sincerely yours,
ROBERT M. HUTCHINS

Mr. Henry C. Simons
Social Science 516
Faculty Exchange

______________________

The University of Chicago
Department of Economics

October 6, 1945

Chancellor Robert M. Hutchins
Faculty Exchange

Dear Mr. Hutchins:

Your good letter of September 10^th was forwarded to me on vacation; hence the tardiness of this reply.

I share most of your disagreements with me! That memo was written for a small group of immediate colleagues—not hypocritically, I hope, but with “slants” that others might easily misinterpret.

I certainly have not felt that the Department is engaged in a bitter struggle with the administration to secure its just desserts. Neither do I object to the passing along of suggestions from reputable quarters. (Levi’s suggestion, by the way, was not without merit, if interpreted as part of his proposal for a large-scale local project in anti-trust investigation.) I was complaining about departmental policy or practice of making no longer-range proposals for recruitment and replacement—not about suggestions coming down to us but about the dearth of suggestions going up.

The Department, I think, should submit to the administration, not only recommendations for immediate, urgent appointments but also a “waiting list,” subject always to revision, of several men whom we definitely want if and when the administration is prepared to act on them. The administration might then make careful, unhurried outside inquiries; and, when outside suggestions are received, we might discuss and report on the relative merits of particular appointments and invite your inquiry on the same basis. Thus the waiting list or appointment program might be kept more or less continuously under critical discussion.

On that matter of what is central and what is ancillary, I think I have an important point, although I might have trouble stating it clearly or persuasively. The point, moreover, is one on which I would anticipate support from you.

About E. H. Carr, I am too strongly and deeply prejudiced for judicious comment. I have seldom reacted so strongly against a book as against his The Conditions of Peace—which is the only Carr book I have read. Knowing nothing of his work on Dostoevski or Bakunin, however, I would have less reason to oppose the appointment if it were in the proposed Russian Institute than if it were in Political Science and International Relations.

My objections to Carr are largely ideological. The Conditions of Peace is a powerful book, very well written and admirable in many parts and aspects. But it is largely and deeply concerned with economics and commercial policy; and here my criticism involves more than bitter disagreement; for here, I think, the fellow is using his rhetorical, journalistic skill to cover up his own lack of insight and understanding. One should not expect all students of politics to discuss economic problems competently. But one may object to their writing arrogantly, caustically, and demagogically about men, books, and subjects that they do not understand.

This book, I think, is one of the outstanding anti-Liberal documents of its time, not only as regards economic policy, domestic and international but also as regards the rights of small nations and their proper place or role in the good society. Carr personifies, for me, almost everything that is wrong with political thinking at both the extreme Right and the extreme Left.

It is significant, I think, that Carr has earned the most bitter denunciation of two such different people as Hayek and Keynes. (Don’t quote me as regards Keynes, for my information is somewhat privileged in that case and second-hand; but I believe it may easily be confirmed.) At best, Carr is a very hot potato in present-day politics—much too hot for wise University appointment, even if one approved of his views.

I should be more diffident about my own reactions to Carr if those of J. Viner and Q. Wright (and Louiee Wright) were not much the same. Incidentally, what is distinctive about Carr (tough political “realism”) is, I think, already adequately represented here, and competently, by Morgenthau.

I’ll be happy to talk sometime about what is central what is ancillary—or as happy as I can be when trying to talk philosophically,

Sincerely yours,

[signed] Henry Simons
Henry C. Simons

ECS-w

P.S. I hear that Milton Friedman, whom I was proposing for Lange’s place, has been appointed to an associate professorship at Minnesota. My scheme thus requires raiding the Minnesota staff for two men, within a few years. Moreover, it might now be best, under that scheme, to get Stigler first.

Source:  University of Chicago Archives. Office of the President. Hutchins Administration Records. Box 73, Folder “Economics Dept., 1943-1945”.

Image Source:  Henry Calvert Simons portrait at the University of Chicago Photographic Archive, apf1-07613, Special Collections Research Center, University of Chicago Library.