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Economists Harvard Seminar Speakers

Harvard. Galbraith’s Special Tuesday Evening Seminar, 1973

 

One of the delights of working with the papers of John Kenneth Galbraith is that the man was simply incapable of writing a straight memo. Some flash of wit or felicitous use of the English language always breaks in. The following announcement gives us some insight into the sort of university service that Galbraith most gladly provided. Soft power was his instrument of choice for departmental politics.

___________________

SPECIAL TUESDAY EVENING SEMINAR

As in earlier years, Professor Galbraith will conduct a series of evening discussions for first year graduate students and others who are interested. Meetings will be in the Littauer Lounge at 7 o’clock, and participants are urged to arrive reasonably on time. They may leave when they wish. Following very brief introductory comments by Professor Galbraith and guests, the subject will be open for discussion. No competently presented argument, however inconvenient, will be denied a hearing. Discussion will continue as long as the audience or the supply of useful ideas endures. This year’s subject and dates are listed below. The guest list is still tentative.

 

October 2, 1973—THE ECONOMICS OF THE PRESENT INFLATION

Guests:
Hendrik S. Houthakker
James S. Duesenberry
John Dunlop

October 16, 1973—THE CORPORATION: IS IT RESPONSIBLE: HAS IT BOUGHT THE COUNTRY

Guests:
Theodore Levitt
Marc Roberts
Abram Chayes
Richard Caves

October 30, 1973—WHAT AND HOW SHOULD ECONOMICS BE TAUGHT AND A Ph.D. EARNED OR ACQUIRED

Guests:
Dale Jorgenson
Robert Dorfman
Sam Bowles
Art McEwan

November 13, 1973—WHAT ARE THE ECONOMICS OF SEX DISCRIMINATION, ARE WOMEN ECONOMIC ARTIFACTS

Guests:
Carolyn Bell
Betsy Munzer
Hazel Denton
Arthur Smithies
Lester Thurow

December 4, 1973—ECONOMICS AND THE PUBLIC PURPOSE

An evening for or against the book. (On this evening, a reasonable quantity of champagne of indifferent quality will be supplied from the accrued royalties, if any)

Guests:
John Kenneth Galbraith
Steve Marglin
Zvi Griliches

 

Source: John F. Kennedy Presidential Library. John Kenneth Galbraith Papers. Box 78. Series 5. Harvard University File, 1949-1990. Folder: “Courses, Non-credit seminar1973”.

Image Source: John Kenneth Galbraith in academic regalia from the Harvard Class Album, 1968.

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Exam Questions Harvard

Harvard. Graduate economic theory exams. Taussig, 1930-35

 

Today I am relieved to post the final batch (1930-1935) of enrollment data and examination questions for Frank W. Taussig’s core economic theory course. All in all nearly a half-century run for Harvard’s Grand Old Man.

Previous batches of transcribed exams are provided via the links below.

Examinations for 1887-90
Examinations for 1891-94
Examinations for 1897-1900
Examinations for 1904-09
Examinations for 1911-14
Examinations for 1915-17
Examinations for 1918-19 [Bullock and Carver]
Examinations for 1920-22
Examinations for 1923-25
Examinations for 1926-30

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1930-31

Course Enrollment: Economics 11
1930-31

[Economics] 11. Professor Taussig.—Economic Theory

Total 58: 50 Graduates, 1 Senior, 7 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1930-31, p. 77.

 

1930-31
HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Examination

Arrange your answers in the order of the questions.
One question may be omitted.

  1. In an examination paper set at Harvard College in 1876 the following question appears: “What is the error in the proposition that high wages make high prices?”
    What answer would have been expected from a student at that time? What answer would you give now?
  2. “The latent influence by which the values of things are made to conform in the long run to the cost of production is the variation that would otherwise take place in the supply of the commodity. The supply would be increased if the thing continued to sell above the ratio of its cost of production, and would be diminished if it fell below that ratio. But we must not therefore suppose it to be necessary that the supply should actually be either diminished or increased. . . . There is no need that there should be any actual alteration of supply; and when there is, the alteration, if permanent, is not the cause, but the consequence of the alteration in value. If, indeed, the supply could not be increased, no diminution in the cost of production would lower the value: but there is by no means any necessity that it should. The mere possibility often suffices.”
    Is this in accord with Mill’s analysis of demand and supply? with Marshall’s? with business experience?
  3. Can you distinguish between “supply price” and “expenses of production” in the following cases:
    1. the temporary equilibrium of supply and demand;
    2. accountants’ figures of cost for agricultural produce;
    3. accountants’ treatment of depreciation in the accounts of a manufacturing enterprise.
  4. In an examination paper set at Cambridge University, England, in 1929, the following appears: “From the point of view of economic principle, analyze the return obtained to-day from fen land drained in the seventeenth century?”
    What answer would Ricardo or Mill have given? What answer would be expected now from a student in Cambridge, England? What from a student in Cambridge, Mass.?
  5. (1) Marshall’s final conclusion as to the tenability of a distinction between interest and rent.
    (2) The following passages:

“The deepest and most important line of cleavage in economic theory” [is] “the distinction between the quasi-rents which do not, and the profits which do, directly enter into the normal supply prices of produce for periods of moderate length.”
“When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labour invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the business man, the proportions are found to be different: in his case the greater part is quasi-rent.”

Is there inconsistency, apparent or real?

  1.    a.  Adam Smith’s remark, that the division of labor is limited by the extent of the market, has been said to state the gist of all there is to be said about external economies.
    1. It has been said, again, that the only internal economies which signify as regards economic theory are those accruing from the growth of production on a large scale.
    2. “If a commodity obeys the law of increasing return, an increase of demand causes much more of it to be produced, — more than if the commodity obeyed the law of constant return, — and at the same time lowers its price. . . . This line of reasoning has been thought by some writers to lend support to the claim that a Protective duty on manufactured imports in general increases the home market for those manufactured goods; and, by calling into play the Law of Increasing Return, ultimately lowers their price to the home consumer.”
    3. Consider these, separately or as a whole.
  1.     a. “Let us suppose that every one owns whatever capital he uses . . . and is not only of equal capacity, but of equal willingness to work, and does in fact work equally hard; also that all work is unskilled, — or rather, unspecialized in this sense, that if any two people were to change occupations, each would do as much and as good work as the other one had done.”
    1. “Let us suppose that labor is not of one industrial grade, but of several; that parents always bring up their children to an occupation of their own grade; that they have a free choice within that grade, but not outside it. Let us suppose, further, that the increase of population in each grade is governed by other than economic causes; it may be fixed, or may be influenced by changes in custom, in moral opinion, etc.”
    2. What would govern relative wages under each of these suppositions? What would govern the value of goods? Which supposition underlies Marshall’s conclusions on the relation between wages and value?

 

 

1930-31
HARVARD UNIVERSITY
ECONOMICS 11
Final Examination

Answers questions 1, 2, 3 briefly; 4 and 5 more at length.

  1. Jevons remarked: “Capital, as I regard it, consists merely in the aggregate of those commodities which are required for sustaining laborers of any kind or class engaged in work. . . . The single and all-important function of capital is to enable the laborer to await the result of any long-lasting work, — to put an interval between the beginning and the end of an enterprise.”
    Wherein does this resemble, wherein differ from, the view of Ricardo? Böhm-Bawerk? Marshall? Clark?
  2. Public encouragement or discouragement for industries of increasing, constant, or decreasing returns, — wherein the analysis of Pigou resembles that of Marshall, wherein differs.
  3. The bearing on the national dividend and its maximization, of the price structure obtaining under —

Simple competition,
Simple monopoly,
Joint supply,
Discriminating monopoly.

  1. Are there grounds for considering “profits” as an element in distribution different from wages, interest, rent?
  2. The doctrine that wages are determined by the marginal productivity of labor; the grounds on which it rests; and the aid it may give on such questions as the (1) basis of fair wages in the arbitration of industrial disputes, and the (2) effect on contractual wages of a compulsory system of social insurance (accident, sickness, old age, unemployment).

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1931-32

Course Enrollment: Economics 11
1931-32

[Economics] 11. Professor Taussig.—Economic Theory

Total 48: 38 Graduates, 4 Seniors, 1 Business School, 5 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1931-32, p. 72.

 

HARVARD UNIVERSITY
1931-32
ECONOMICS 11
Mid-year Examination

Arrange your answers in the order of the questions.
One of the first six questions may be omitted.

  1. “The Classical Economists appreciated the necessity of a fund to support labour during the period of production; but they overlooked the continuous character of production and output, and confused the working capital, which is provided by continuously feeding the flow of available income back into the machine of process, with the liquid capital (goods in stock) at the commencement of any period of process. [Liquid capital is elsewhere defined as “goods yielding nothing, but capable of being used or consumed at any time”; it does not include goods in the hands of merchants.] They did not clearly perceive that the capital to keep labour in employment is found, not in the stocks of goods already available, nor by the abstention from the consumption of available income, but by decisions which have the effect (a) of determining what proportions of the goods emerging from the machine of process are in fixed and in liquid form respectively, and (b) of applying the flow of available income in one way instead of in another, namely, by supporting productive consumers instead of unproductive consumers.” M. Keynes.
    Does the error here described appear in the Classical Economists? and is the criticism of their treatment of abstention valid?
  2. “Marshall’s treatment [of supply] is highly elliptical. A striking illustration of his tendency to telescope his argument is his common practice in his graphs of labelling cost curves and supply curves alike with the symbols s-s’, conventionally used for supply curves, and thus diverting the attention of his readers , and perhaps also occasionally his own attention, from the necessity of selecting from the many possible types of cost curve that one which in the given circumstances alone has claims to being considered as also a supply curve.” Is Marshall open to this criticism? Illustrate and comment.
  3. The bearing (if any) of the concept of a representative firm on the theory of value, of rent, of business profits.
  4. Explain the method by which one can derive the supply price of a commodity produced under conditions of joint supply; that by which one can derive the demand price of a commodity demanded under the conditions of joint demand.
    What bearing, if any, have these methods of analysis on the phenomena of value and distribution in a society which is economically stratified?
  5. “When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labour invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different: in his case the greater part is quasi-rent.”
    Is the greater part of the earnings of business men to be regarded as quasi-rent? Is the remainder only to be regarded as true earnings of effort?
  6. “The extra income derived from rare natural abilities bears a closer analogy to the surplus produce from the holding of a settler who has made an exceptionally lucky selection, than to the rent of land in an old country.” Is this extra income in the nature of a quasi-rent, in either case?

Not to be omitted.

  1. The following have been suggested, by one writer or another, as the grounds on which the distinction between interest and rent turns:
    1. Land is fixed in amount, instruments made by man are not.
    2. Land is an instrument made by man in essentially the same sense as is any other kind of capital-good; its industrial serviceability and its availability are the result of man’s action.
    3. Competition equalizes the returns on instruments but not those on land.
    4. The returns on land and instruments alike depend on marginal productivity.

Give your own views (briefly) on each point; and sum up with a statement of your conclusion on the tenability of the distinction.

 

HARVARD UNIVERSITY
1931-32
ECONOMICS 11
Final Examination

Arrange your answers in order of the questions.

  1. “With regard to utility, two views are commonly held. The older and more naïve is that an increment of supply (which should always be a continuous stream and not a stock) makes its specific addition to the utility of the total, without affecting the utility of the earlier increments. This is the basis for the familiar utility curve with the implication of consumer’s surplus. On the other hand, it may be held that the utility of all increments is always alike, the addition of each increment to the total bringing down the utility of the earlier ones to the level of its own. Both these views lead to nonsensical results: the first to fantastic magnitudes for total utilities, and the second to the conclusions that the utility of a larger supply may be less than that of a smaller and consequently that people often choose and pay for a reduction in utility.”
    Do these nonsensical results necessarily follow?
  2. “Pure profits are at once necessary and probably non-existent.” What is meant by “pure profits” in this statement? Given the meaning, what do you say to it?
  3. What is the influence of technological improvements on the rate of interest? what the influence of the rate of interest on technological improvements?
  4. “It is obvious that an increase in the supply of capital instruments will make for an increase in the national dividend as a whole. Can it at the same time make for a decrease in the real income of labour? The analysis relevant to this question has been developed by Marshall…. This analysis shows, first, that every factor of production, including entrepreneurs’ work, tends to be remunerated at a rate equivalent to its marginal net product of commodities in general. It shows, secondly, that, other things being equal, the marginal net product, in this sense, of every factor diminishes as the supply of the factor increases beyond a fairly low minimum. This proposition expresses what may be called the law of diminishing returns to individual factors of production. This law must not be confused with the law of diminishing returns to resources in general invested in a given occupation….”
    How far was this analysis developed by Marshall? Are the two laws not to be confused?
  5. Does an elastic demand for one commodity necessarily imply that the demand for some other commodity is inelastic?
  6. What grounds are there for the statement that in Great Britain the elasticity of the aggregate demand for labor is immensely greater than unity?

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 1932-33

Course Enrollment: Economics 11
1932-33

[Economics] 11. Professor Taussig.—Economic Theory

Total 42: 33 Graduates, 1 Junior, 6 Radcliffe, 2 Others.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1932-33, p. 66.

 

HARVARD UNIVERSITY
1932-33
ECONOMICS 11
Mid-year Examination

  1. The original and indestructible powers of the soil; what part they play in Ricardo’s treatment of rent, what in Marshall’s.
  2. “If, for simplicity of exposition, we leave out of account raw materials, the stream of floating capital is constituted almost entirely of wage-goods — goods that are paid over (through money) as wages. Thus, the larger the addition to the normal stream of floating capital that business men can secure in response to a given rise in their interest offer, due to a given improvement in their expectations, the larger proportionately will be the addition made to the real demand for labour. . . .
    “When a boom comes, a large part of the impact is always likely to be upon industries engaged in instrumental trades: and, plainly, extra work there will not lead to an addition to the flow of wage goods — floating capital — for a considerable time. Some part of the primary effect will, however, touch the industries that make these goods and, so far as it does this, we shall have an extra flow of them available to pay for extra labour. This was the important point that the doctrine of the Wages Fund ignored. It must be noticed, however, that this source of additions to floating capital (i.e. extra work) is only available, roughly speaking, so long as unemployed workers are available to be called into industry. If expectations and the desire to employ workpeople go on expanding after this point has been passed, the source is no longer available, and, consequently, the element of elasticity which it accords to the supply of floating capital no longer exists.”
    Was “the important point” here noted in conflict with the Wages Fund doctrine? and is the statement otherwise in conflict with that doctrine?
  3. The tendency of profits to a minimum; how treated by Ricardo, by Mill, by Cairnes?
  4. Explain, with the utmost brevity and precision,

“real cost” of production,
expenses of production,
supply price,
marginal cost,
bulk line cost.

  1. “It may be conceded that if a certain class of people were marked out from their birth as having special gifts for some particular occupation, and for no other, so that they would be sure to seek out that occupation in any case, then the earnings which such men would get might be left out of account as exceptional, when we are considering the chances of success or failure for ordinary persons.”
    Consider whether, given the premise, the conclusion here stated would follow; what is the bearing of the reasoning on Walker’s theory of business profits; what Marshall would say of premise and conclusion.
  2. What bearing, if any, on the concept of non-competing groups do you find on a consideration of, —
    1. universal education, general and technical;
    2. the influence of conventional necessaries;
    3. the representative firm;
    4. the law of derived demand for a commodity demanded jointly with other commodities.

 

HARVARD UNIVERSITY
1932-33
ECONOMICS 11
Final Examination

  1. “Ricardo appears to have seen distinctly almost everything of primary importance in the scientific doctrine of capital, very much as it is known now.” Marshall.
    If so, wherein? If not, wherein not?
  2. — The price of wheat raised on good land is the same as that of wheat raised on the marginal zone, and it affords a surplus above wages and interest paid by farmers for labor and capital used in the tilling of the good land.
    — The existence of this surplus in its original form, that of wheat, affects the supply and the price of that product.
    — The price of cloth woven on good looms is the same as that of equally good cloth woven on marginal ones, and it affords a net surplus above the cost of maintaining the stock of looms and the wages and interest paid by manufacturers for further capital used in connection with the good looms.
    — The existence of this surplus in its original form, that of cloth, affects the supply and the price of this product.
    Discuss (1) the bearing of these statements on the older distinction between capital and land, and (2) the connection between these surpluses and price.
  3. “The diminishing return which arises from an ill proportioned application of the various agents of production into a particular task has little in common with the broad tendency to the pressure of a crowded and growing population on the means of subsistence. . . . It has no very close connection with the tendency of agriculture in an old country to yield a diminishing return to a general increase of resources well applied in cultivation: and indeed exactly parallel cases can be found of a diminishing return to particular resources when applied in undue proportion, even in industries which yield an increasing return to increased applications of capital and labour when appropriately distributed.”
    Is this statement in accord with the general current of economic theory at the present time? Do you agree with it?
  4. “An increase in the supply of capital . . . will make for an increase in the national dividend as a whole. Can it at the same time make for a decrease in the real income of labour? The analysis relevant to this question has been developed by Marshall. Subject to certain important qualifications, which do not affect the present argument, this analysis shows, first, that every factor of production, including entrepreneurs’ work, tends to be remunerated at a rate equivalent to its marginal net product of commodities in general. It shows, secondly, that, other things being equal, the marginal net product, in this sense, of every factor diminishes as the supply of the factor increases beyond a fairly low minimum. . . . This proposition expresses what may be called the law of diminishing returns to individual factors of production. This law must not be confused with the law of diminishing returns to resources in general invested in a given occupation.”
    Wherein does this distinction differ from that contained in the preceding extract? Do you agree with it?
  5. Consider whether it is (1) justifiable, (2) practicable to “charge what the traffic will bear”
    1. when there is a large element of overhead costs;
    2. when there is a large element of joint cost;
    3. when there is simply monopoly;
    4. when there is discriminating monopoly.

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1933-34

Course Enrollment: Economics 11
1933-34

 

[Economics] 11. Professor Taussig.—Economic Theory

Total 20: 11 Graduates, 2 Seniors, 5 Radcliffe, 2 Business School.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1933-34, p. 85.

 

HARVARD UNIVERSITY
1933-34
ECONOMICS 11
Mid-year Examination

One question may be omitted.

  1. “The foundations of the theory [of cost of production and value] as they were left by Ricardo remain intact.” Does Marshall’s treatment of the relation of “general wages” to value bear out this statement? of differences of wages?
  2. Explain
    1. Internal economies of large-scale production.
    2. External economies of large output.
    3. External dis-economies of large output.
  3. “Ricardo, and the economists of his time generally were too hasty in deducing this inference [tendency to increased pressure] from the law of diminishing return; and they did not allow enough for the increase of strength that comes from organization. But in fact every farmer is aided by the presence of neighbours, whether agriculturists or townspeople. . . If the neighbouring market town expands into a large industrial centre, all his produce is worth more; some things which he used to throw away fetch a good price. He finds new openings in dairy farming and market gardening, and with a larger range of produce he makes use of rotations that keep his land always active without denuding it of any of the elements that are necessary for its fertility.” Do you agree?
  4. “The flow of investment of resources for future needs consists of two streams. The smaller consists of new additions to the accumulated stock: the larger merely replaces that which is destroyed; . . . The annual flow of this second stream is probably not less than a quarter of the total stock of capital, even in a country in which the prevailing forms of capital are as durable as in England. It is therefore not unreasonable to assume for the present that the owners of capital in general have been able in the main to adapt its forms to the normal conditions of the time, so as to derive as good a net income from their investments in one way or another.” Has this any bearing on the doctrine of quasi-rent?
  5. If the values of goods were proportional to their real costs, would the utility curve and the demand curve be the same, for persons receiving labor incomes?
  6. What is to be said
    1. of the necessaries of life, as regards elasticity of demand, consumer’s surplus, value and differences of wages;
    2. of conventional necessaries, in the same particulars?
  7. — “The price of wheat raised on good land is the same as that of wheat raised on the marginal zone, and it affords a surplus above wages and interest paid by farmers for labor and capital used in the tilling of the good land.
    — “The fact that farmers pay landlords for this surplus has no effect on the price of wheat.”
    — “The price of cloth woven on good looms is the same as that of equally good cloth woven on marginal ones, and it affords a net surplus above the cost of maintaining the stock of looms and the wages and interest paid by manufacturers for further capital used in connection with the good looms.
    — “The fact that entrepreneurs pay capitalists for this surplus has no effect on the price of cloth.”

What bearing have these passages on the theory of rent? of business profits?

 

HARVARD UNIVERSITY
1933-34
ECONOMICS 11
Final Examination

Arrange your answers in the order of the questions.

  1. Is interest treated as a derivative from “profits”

by Ricardo,
by Marshall,
by Böhm-Bawerk,
by those writers who regard profits as appearing only in a “dynamic” state?

Your own view?

  1. “There is always an interval between the setting to work of a man and the emergence, in consequence of his work, of any finished product, whether for consumption or as a productive instrument for the machine of industry. . . . What is essential is the time interval between the centre of gravity of the labour employed and the output (or, more strictly, the sale) of the finished product. I shall call this interval the period of production.”
    Wherein is the period of production here considered like, and wherein unlike, that discussed by F. A. Walker? by Böhm-Bawerk? For what purposes of economic analysis is the period described in the extract appropriate?
  2. “Autonomous” and “induced” inventions: their bearing on “increasing returns” and on the marginal productivity theorem.
  3. Reflections suggested by a Rembrandt, as regards
    1. market price;
    2. total utility and consumers’ surplus;
    3. the distinction between “wealth” and “capital.”
  4. The problems and distinctions implied in the terms

Economic Welfare,
National Dividend,
Marginal Social Net Product.

____________________________________

 1934-35

Course Enrollment: Economics 11
1934-35

 

[Economics] 11. Professors Taussig and Schumpeter.—Economic Theory

Total 27: 21 Graduates, 1 Senior, 5 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1934-35, p. 81.

 

 

Reading List for Economics 11, Fall Semester 1934

Posted from Wolfgang Stolper’s course notes.

HARVARD UNIVERSITY
1934-35
ECONOMICS 11
Mid-year Examination

One question may be omitted. Arrange your answers in the order of the questions.

  1. “Suppose that society is divided into a number of horizontal grades, each of which is recruited from the children of its own members; and each of which has its own standard of comfort, and increases in numbers rapidly when the earnings to be got in it rise above, and shrinks rapidly when they fall below that standard. Suppose, then, that parents can bring up their children to any trade in their own grade, but cannot easily raise them above it and will not consent to sink them below it. . . .”
    Suppose also that there is free competition as regards the earnings of capital.
    On these suppositions what would be the relation between

    1. the values of commodities and their “real cost”;
    2. the values of commodities and their money costs;
    3. the values of commodities and their supply prices?
  2. “Internal economies of large-scale production are primarily a long-run phenomenon, dependent upon appropriate adjustment of scale of plant to each successive output. They should not be confused with the economies resulting from ‘spreading of overhead.’” Why or why not to be thus confused?
    “Internal economies of large-scale production are independent of the size of output of the industry as a whole, and may be accruing to a particular concern whose output is increasing at the same time that the output of the industry as a whole is undergoing a decline.” Why or why not?
  3. Does quasi-rent have the same meaning in the following passages?
    1. “The quasi-rent of farm buildings.”
    2. “When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labour invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different: in his case the greater part is quasi-rent.”
    3. “In relation to normal value the earnings of high ability are to be regarded as a quasi-rent rather than as a rent proper.”
  4. It is fatal to the conception of consumers’ surplus to admit:
    1. that differences in income make it impossible to measure satisfactions;
    2. that each unit of a homogeneous supply yields ipso facto the same satisfaction as every other unit;
    3. that the satisfaction indicated by the high price paid for an article having “prestige value” will disappear when the article becomes cheap.
  5. Does “capital,” as distinguished from “capital goods,” serve to synchronize the effort of labor with the reward for labor? If so, how? If not, why not?
  6. Explain the distinctions
    1. between the intensive and the extensive margins of cultivation for land;
    2. the intensive and the extensive zones of indifference in the application of labor;
    3. the marginal product of labor and the product of marginal labor.

State summarily your opinion of the usefulness of the distinctions as tools of analysis.

 

Course outline and final exam for Economics 11, Spring Semester 1935

Transcribed from Joseph Schumpeter’s papers and posted earlier.

Source for examination questions: Harvard University Archives. Prof. F. W. Taussig, Examination Papers in Economics 1882-1935 (Scrapbook).

Image Source: Frank W. Taussig in Harvard Class Album, 1934.

Categories
Harvard M.I.T. Suggested Reading Syllabus

Harvard. Undergraduate reading list for Industrial Organization and Public Policy. Bishop, 1955-56

 

 

Robert L. Bishop was called by his alma mater to render service to cover the undergraduate course on industrial organization and public policy in 1955-56. He still taught that year at M.I.T. according to the course staffing records, so the cross-Cambridge commute was a convenient (for all parties) gig. The previous year the same course was co-taught by Carl Kaysen and Merton Peck. Comparing the Spring term syllabus, items I, III, and V were the taken over “as is” by Bishop. The only question is now how much of the Fall term reading list was in common.

_____________________________

Course Enrollment

[Economics] 161. Industrial Organization and Public Policy. Associate Professor Bishop. (M.I.T.). Full course.

(Fall) Total 130: 2 Freshmen, 15 Sophomores, 74 Juniors 36 Seniors, 3 Radcliffe.
(Spring) Total 123: 2 Freshmen, 8 Sophomores, 73 Juniors 37 Seniors, 3 Radcliffe.

 

Source: Harvard University. Report of the President of Harvard College 1955-56, pp. 77-78.

_____________________________

HARVARD UNIVERSITY
Department of Economics

Economics 161
Fall Term 1955-56
Professor Bishop

 

  1. The Modern Business Unit (Sept. 26 – Oct. 7; 4 lectures, 2 sections)

N. S. Buchanan: The Economics of Corporate Enterprise, Ch. 3
H.G. Guthman and H.E. Dougall, Corporate Financial Policy, Ch. 2
A.A. Berle and G.C. Means: The Modern Corporation and Private Property, Bk. II, Ch. 1
R.A. Gordon: Business Leadership in the Large Corporation, Ch. 1-3, 12-14
National Bur. of Ec. Research: Cost Behavior and Price Policy, Ch. X
H.L. Purdy, M.L. Lindahl and W.A. Carter: Corporate Concentration and Public Policy, (2nd ed.) Ch. 7
J.K. Butters and J.V. Lintner: The Effects of Taxation on Corporate Mergers, Chs. IX, X

  1. The Functioning of Markets and the Economic Norms of Public Policy (Oct. 10-Nov. 4; 7 lectures, 4 sections)

J. S. Bain: Price Theory (or Pricing, Distribution, and Employment, Rev. Ed.) Ch. 1-7 (Ch. 3 is useful chiefly as review)

  1. Monopolistic and Oligopolistic Markets (Nov. 7 – Nov. 30; 8 lectures, 2 sections, hour exam)

Donaldson Brown, “Pricing Policy in Relation to Financial Control” (reprints)
TNEC Monograph No. 21; Monopoly and Competition in American Industry, Ch. IV
W. Nutter: “The Extent and Growth of Enterprise Monopoly” (pp. 141-153) in Gramp and Weiler, eds., Economic Policy: Readings in Political Economy
W.A. Adams, ed.: The Structure of American Industry (rev. ed.) Ch. V-XI
F. Machlup: The Basing-Point System, Ch. 1, 3, 6, 7
“Big Business in a Competitive Society,” Fortune, Supplement, Feb. 1953

  1. Anti-Trust Policy (Dec. 5- Dec. 21; 6 lectures, 2 sections)

S. C. Oppenheim: Cases on Federal Anti-Trust Laws, pp. 57-69; App. A, B, C (pp. 963-85) pp. 106-127, 164-182, 250-265, (monopoly cases); pp. 281-286, 291-301, 310-330 (combination cases)
S.C. Oppenheim: 1951 Supplement, pp. 203-289 (Alcoa remedy)
U.S. v. United Shoe Machinery Corp., Fed. Supp.
E.S. Mason: “The Current Status of the Monopoly Problems in U.S.,” Harvard Law Review, June 1949
C.E. Griffin: An Economic Approach to Anti-Trust Problems
J.B. Dirlam and A.E.Kahn: Fair Competition: The Law and Economics of Anti-Trust Policy, Ch. 1, 2, 5, 9

Reading Period Assignment

Markham: Competition in the Rayon Industry

_____________________________

HARVARD UNIVERSITY
Department of Economics

Economics 161
Spring Term 1956
Professor Bishop

 

  1. Markets of Large Numbers (Feb. 1 – Mar. 2; 8 lectures, 5 sections)

Agriculture
Cotton Textiles
Women’s clothing
Crude Oil

R. Schickele, Agricultural Policy, Ch. 9-11, 13-17.
K. Brandt, Farm Price Supports, Rigid or Flexible?
J.K. Galbraith, “Farm Policy: The Current Position,” Journal of Farm Economics, May, 1955, pp. 292-304.
A.M. McIsaac, “The Cotton Textile Industry,” in Adams, The Structure of American Industry, 2nd ed.
“Adam Smith on 7th Avenue,” Fortune [handwritten note: Jan. 1949?]
N. Ely, “The Conservation of Oil,” Ch. 11 in Readings in the Social Control of Industry.
E.V. Rostow, A National Policy for the Oil Industry, Part II.

  1. The Plane of Competition—The Securities Markets (Mar. 5-Mar. 9; 2 lectures, 1 section)

Merrill, Lynch, Pierce, Fenner and Beane, How to Read a Balance Sheet.
W. E. Atkins, G.W. Edwards, and H.G. Moulton, The Regulation of the Securities Markets, Chs. 2-6.

  1. The Regulated Industries (Mar. 12 – Apr. 13; 8 lectures, 3 sections; hour exam, Apr. 13)

Electric Power
Transportation

Twentieth Century Fund: Electric Power and Government Policy, Ch. I-IV, X.
M. L. Fair and E.W. Williams, Jr., Economics of Transportation, Ch. 18-23, 25, 30, 32.

  1. The Patent System (Apr. 16 – Apr. 20; 2 lectures, 1 section)

Symposium, Law and Contemporary Problems, Vols. 12 and 13 (1947-48)—articles by:

Hamilton and Till, Vol. 13, pp. 245-59,
Abramson, Vol. 13, pp. 339-53,
Stedman, Vol. 12, pp. 649-79,
Davis, Vol. 12, pp. 796-806.

R. L. Bishop, “The Glass Container Industry,” in Adams, The Structure of American Industry, 1st ed.

  1. Nationalization and Planning (Apr. 23 – Apr. 30; 3 lectures, 1 section)

J. E. Meade, Planning and the Price Mechanism, pp. 1-104.
B.W. Lewis, British Planning and Nationalization, Ch. 1-3.
H.A. Clegg and F.E. Chester, The Future of Nationalization, Ch. 1, 3.

Reading Period Assignment

To be announced.

 

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. (HUC 8522.2.1) Box 6, Folder “Economics, 1955, 1956, (2 of 2)”.

Image Source:   Robert Lyle Bishop. MIT Museum.

 

Categories
Exam Questions Harvard

Harvard. Junior political economy final examination. Green, 1870

 

 

In a previous post I transcribed the final exam questions for Francis Bowen’s senior year course “Political Economy” at Harvard, 1868-69. In that post you will also find biographical information.

In the following year, 1869-70, “Political Economy” was  offered to seniors in the first term (Bowen’s text-book). It was also taught (with a different text-book: Rogers) in the second term of the junior year.

_______________________________

From the Annual Report of the President of Harvard College, 1869-70

[There are four subjects and four instructors listed for the required subjects for second term Juniors in 1869-70 according to the annual report of the president of Harvard College.]

 

Required Studies. Text-books Number of students Number of Sections Number of Exercises per Week Number of Hours per Week
Instructors. Subjects.
Mr. O. W. Holmes, Jr. Constitutional Law Alden’s Science of Government

158

 4 1

4
Mr. N. St. J. Green Philosophy Hamilton’s Metaphysics;
Rogers’s Political Economy

158

 3 3

9
Prof. Bowen Forensics (four)

158
Prof. Lovering Physics Lectures

158

 2 1

2

 

Textbook:   James E. Thorold Rogers, A Manual of Political Economy for Schools and Colleges. Oxford: Clarendon Press, 1868.

 

Source: Harvard University. Annual Report of the President of Harvard University, 1869-1870, p. 38.

_______________________________

POLITICAL ECONOMY

  1. Is a hard bargain, voluntarily entered into, an advantage to both parties, or a disadvantage to one? Why, and how?
  2. What is the cause of value? What is the measure of value?
  3. What is Capital? Profit? Wages? Rent?
  4. What are the causes which determine the Wages of Labor?
  5. What is the effect of laws regulating the rate of Interest? How do they produce that effect?
  6. What is meant by Demand and Supply? Give an illustration of the price of an article being affected by Demand. Give one of its being affected by Supply.
  7. Is Capital equally distributed to all kinds of Labor? If it is, why is it? If it is not, why is it not?
  8. What are the proper functions of Government?
  9. What are the general principles of Taxation?
  10. Why are the Precious Metals used as Money? How are they distributed?

 

Jun. Ann. June, 1870.

 

Source: Harvard University Archives. Harvard University. Final Examinations 1853-2001. Box 1, Folder “Final examinations, 1869-1870”.

 

Image Source:  Portrait of Francis Bowen from the Harvard Square Library (Unitarian Universalism). The Harvard Book: Portraits.

 

Categories
Exam Questions Harvard Syllabus

Harvard. Principles of Economics. James Tobin’s Student Reading Assignments, 1936-37

 

A few posts ago I provided a transcription of a bibliography of supplementary readings for Harvard’s principles of economics course in 1938-39.  While not uninteresting and indeed suggestive of the breakdown of topics and associated canonical texts, the bibliography provided little insight to the actual course coverage.

To remedy this I took a deep dive into James Tobin’s sophomore year notes for the course that run  260 consecutively numbered, clean hand-written notes for his readings along with brief summaries of the content of the section meetings. I have written down the exact sequence of readings he took notes on and have included the dates of the sections that give us approximate windows for when he did the readings. For the record, Tobin got an A in the course which hardly surprises. Other students could have fallen far short on the reading, but not Tobin!

The two main texts by Taussig and Slichter come as no surprise. Ten chapters were also assigned from a draft book manuscript by McIsaac and Smith that was published the following year. Tobin was fairly exact and consistent in identifying the chapter numbers and titles in his reading notes for Taussig and Slichter. His chapter titles for McIsaac and Smith differ quite substantially from those of the printed textbook, so I have included both.

To complete the set, I have included two semester final exams with this post.

______________________

Course Announcement

Economics A. Principles of Economics

Tu., Th., Sat., at 11. Professor Burbank and Dr. J. R. Walsh, and other members of the Department.

Economics A may be taken by properly qualified Freshmen with the consent of the instructor.

Source:  Announcement of the Courses of Instruction Offered by the Faculty of Arts and Sciences during 1936-37.   Official Register of Harvard University,  Vol. XXXIII, No. 42 (September 23, 1936) p. 141.

______________________

Primary Course Texts

Taussig, Frank W. Principles of Economics 3rd ed. Volume I; Volume II.

Slichter, Sumner H. Modern Economic Society. New York: Henry Holt and Company, 1931.

McIsaac, Archibald MacDonald and James Gerald Smith. Introduction to Economic Analysis. Boston: Little, Brown and Company, 1937.

“The authors gratefully acknowledge the many constructive criticisms and the friendly co-operation offered by the instructors in Economics A at Harvard University, where a preliminary edition of the text was used in during 1936-37.”

______________________

 Reading Notes Sequence
James Tobin, 1936-37

Official beginning of classes Thursday October 1, 1936.

Taussig.

Chapter 1 [Wealth and Labor]

Slichter.

Chapter I [The Control of Economic Activity]
Chapter 3 [Free Private Enterprise],

Section
Tuesday 10/6/36

Taussig.

Chapter 2 [Of Labor in Production];

Slichter.

Chapter 2 [Some Fundamental Economic Concepts]

Section
Thursday 10/8/36, Saturday 10/10/36

Slichter.

Chapter 3 [Free Private Enterprise],

Taussig.

Chapter 3 [The Division of Labor and the Development of Modern Industry]
Chapter 4 [Large-Scale Production]

Slichter.

Chapter 7 [Large Business Units]
Chapter 5 [Machine Industry]
Chapter 6 [Specialization]

Section
Saturday 10/17/36

Taussig.

Chapter 5 [Capital]
Chapter 8 [Introductory: Exchange, Value, Price]

Slichter.

Chapter 4 [Modern Industry—A Capitalistic Organization]
Chapter 11 [Modern Industry—A Credit Economy]

Section
[no date]

McIsaac & Smith.

Chapter I [Notes: The Approach to Economic Analysis. Book: Nature and Purpose of Economic Analysis]
Chapter II [Notes: Contemporary Economic Background. Book: Production and Income in the Modern Economy]
Chapter III [Notes: Economic Valuations. Book: The Mechanism of Exchange]
Chapter IV [Notes: Factors Affecting Demand. Book: Consumer Demand]
Chapter V [Notes: Methods of Determinaing Prices. Book: Analysis of Supply: Cost of Production]

Section
Tuesday 11/10/36, Thursday 11/12/36, Saturday 11/14/36

McIsaac & Smith

Chapter VI [Notes: Current Supply Price. Book: Current Price Adjustment: Competitive Conditions]
Chapter VII [Notes: Current Supply Price and Costs of Production. Book: Current Price Adjustment: Monopolistic Conditions]

Section
Tuesday 11/17/36, Thursday 11/19/36

McIsaac & Smith

Chapter VIII [Notes: Dynamic Supply Price & Costs of Production. Book: Normal Tendencies in Price Adjustment]
Chapter IX [Notes: Price Spreads. Book: Supply and Price under Dynamic Conditions]

Section
Tuesday 12/1/36

Slichter.

Chapter 8 [Modern Business Organizations]

Section
Thursday 12/3/36

Slichter.

Chapter 17 [Public Authority as a Determinant of Price—The Problem in General]
Chapter 18 [Public Authority as a Determinant of Price—Public Utility Rates]
Chapter 19 [Public Authority as a Determinant of Price—The Stabilization Operations of the Federal Farm Board]
Chapter 22 [The Position of the Consumer]

Section
Tuesday 12/15/36, Thursday 12/17/36

Slichter.

Chapter 21 [The Determination of the Price Level]

Taussig.

Chapter 17 [The Precious Metals. Coinage]
Chapter 18 [The Quantity of Money and Prices]
Chapter 19 [The Cost of Specie in Relation to its Value]
Chapter 20 [Bimetallism]
Chapter 21 [Bimetallism, continued. The Displacement of Silver]
Chapter 23 [Government Paper Money]
Chapter 22 [Changes in Prices]

Section
Thursday 1/14/37

Taussig.

Chapter 24 [Banking and the Medium of Exchange]
Chapter 25 [Banking Operations]

Slichter.

Chapter 11 [Modern Industry—A Credit Economy]

Section
Tuesday 2/9/37, Thursday 2/11/37

Slichter.

Chapter 11 [Modern Industry—A Credit Economy]

Taussig.

Chapter 30 [The Theory of Prices Once More]

Section
Saturday 2/13/37, Tuesday 2/16/37, Thursday 2/18/37, Saturday 2/20/37

Taussig.

Chapter 32 [The Foreign Exchanges]
Chapter 33 [The Balance of International Payments]
Chapter 34 [The Theory of International Trade. Why Particular Goods are Exported or Imported]
Chapter 36 [Protection and Free Trade. The Case for Free Trade]
Chapter 37 [Protection and Free Trade, continued. Some Arguments for Protection]

Section
Tuesday 2/23/37, Thursday 2/25/37, Saturday 2/27/37

Slichter.

Chapter 29 [International Economic Policies—Restrictions on Imports and Exports]

Section
Tuesday 3/2/37, Thursday 3/4/37

McIsaac & Smith.

Chapter 10 [Notes: Demand for Indirect Uses. Book: Producer’s Demand]

Section
Saturday 3/6/37, Tuesday 3/9/37

Taussig.

Chapter 38 [Interest on Capital used in Production. The Conditions of Demand]
Chapter 39 [Interest, continued. The Equilibrium of Supply and Demand]
Chapter 40 [Interest, Further Considered]
Chapter 42 [Rent, Agriculture, Land Tenure]
Chapter 43 [Urban Site Rent]
Chapter 44 [Rent, concluded.]

Section
Saturday 3/13/37, Tuesday 3/16/37, Thursday 3/18/37, Saturday 3/20/37

Taussig.

Chapter 47 [Differences of Wages. Social Stratification]
Chapter 52 [The General Level of Wages]
Chapter 53 [Population and the Supply of Labor]
Chapter 54 [Population, continued.]

Slichter.

Chapter 9 [The Organization of Labor]

Section
Saturday 3/27/37, Tuesday 3/30/37, Thursday 4/1/37, Saturday 4/3/37

Taussig.

Chapter 49 [Business Profits]
Chapter 50 [Business Profits, continued.]
Chapter 51 [Great Fortunes]
Chapter 55 [Inequality and its Causes. Inheritance]

Encyclopedia of Social Sciences–Article on Population

Meade, James. on Population [in An Introduction to Economic Analysis and Policy, 1936] Part IV, chapter II [The Optimum Supply of Labour].

Hansen, Alvin. Theory of Population, Growth and Decline [Chapter XII in Economic Stabilization in an Unbalanced World, 1932.]

Section
Thursday 4/15/37, Saturday 4/17/37,
Tuesday 4/20/37, Thursday 4/22/37, Saturday 4/24/37,
Tuesday 4/27/37, Thursday 4/29/37, Saturday 5/1/37, 
Tuesday 5/4/37, Saturday 5/8/37,
Tuesday 5/11/37, Thursday 5/13/37,
Tuesday 5/18/37,
Thursday 5/27/37

Taussig.

Chapter 62 [Railways]
Chapter 63 [Railway Problems, continued]
Chapter 64 [Public Ownership and Control]
Chapter 65 [Combinations and Trusts]
Chapter 45 [Monopoly Gains]

Slichter.

Chapter 16 [Monopoly and Custom as Determinants of Price]
Chapter 28 [The Support of the State]

Silverman, Herbert Albert. Taxation; Its Incidence and Effects. London: Macmillan, 1931.

Chapter 5. General Principles of Incidence.

Slichter.

Chapter 20 [The Business Cycle]

Wooton, Barbara. Plan or No Plan. New York: Farrar & Rinehart, 1935.

Chapter 1. The Nature of an Unplanned Economy.
Chapter 2. Nature of Russian Planned Economy.
Chapter 3. Achievements and Possibilities of an Unplanned Economy.

 

Source: Sequence of readings assemble from Yale University Archives. James Tobin Papers. Box 7, Volume Economics A.

______________________

1936-37
HARVARD UNIVERSITY
ECONOMICS A
Mid-Year Final Examination 

Part I
Answer TWO of the following three questions

  1. “In the long run the factors which are of importance in explaining prices are different from those which are of importance in the short run.” Discuss critically.
  2. Explain and distinguish between the determination of prices under conditions of:
    1. Indirect or monopolistic competition.
    2. Pure competition.
  3. “Both monopolies and monopolistic competition (indirect competition) may lead to an uneconomical use of the factors of production.” Discuss.

 

Part II
Answer all questions

  1. In view of the tremendous advantages accruing to the large unit of production, how can one explain the continued existence, and in some lines of industry and trade, the prevalence of the small scale enterprise?
  2. Discuss (a) the process of formation and (b) the function of the country’s capital equipment.
  3. “It is highly doubtful whether from a social point of view the advantages of the corporate form of enterprise outweigh its disadvantages.” Discuss.
  4. “Everybody knows that the trouble with this country is a shortage of money. You know it to be true in your case; I know it to be true in mine. My plan is simple. On Christmas morning — at the very time when extra cash will be appreciated — I propose to give every man, woman, and child a brand new dollar bill for every dollar he or she now has.” Discuss.

 

1936-37
HARVARD UNIVERSITY
ECONOMICS A
Year-End Final Examination 

Part I

  1. Hour essay on quotation (a) or (b).
    1. “In a price economy the factors of production are so distributed that the goods most desired by consumers are produced by the most efficient methods. A control planning board could at best only duplicate the results which in an unplanned economy are achieved without conscious effort.”
    2. “Most of our economic troubles are ascribable to the fact that we are half way between laissez-faire and free competition on the one hand and a planned economy on the other. Thus we get many of the evils of both without the benefits of either.” Discuss with special reference to the “evils” and “benefits,” and give your opinion as to where the balance lies.

 

Part II
Write on each question of this part.

  1. It is said that wages are determined by:
    1. the law of supply and demand,
    2. the process of bargaining—individual and collective—between workers and employers,
    3. Social stratification—i.e. non-competing groups.Can these explanations be reconciled with the marginal productivity theory?
  2. Some economists have denied that interest corresponds to a real cost of production as wages correspond to labor. They say that interest is rather a surplus above actual cost, and a measure of capitalistic exploitation of wage-earners. According to them interest would not arise in a communist economy.
    Do you agree? Why or why not?

 

Part III
Write on any TWO of the following.

  1. “Lately our imports of goods have been increasing faster than our exports. If this tendency continues it will eventually bankrupt the country. We can no more continue to pay out more than we take in than can a business man afford to have outgo continually in excess of income.”
  2. Explain the mechanism by which an increase in aggregate bank reserves will affect the level of prices.
  3. Discuss the causes of industrial fluctuations and the public action that might ameliorate them.
  4. A tax on unimproved land will not be shifted but a tax on factory buildings probably will be shifted. Do you agree? Why or why not?

Source: Harvard University Archives. Department of Economics. Course reading lists, syllabi, and exams 1913-1992 (UA V 349.295.6), Box 1, Folder “Economics I, Final Exams 1913-1939”.

 Image Source: James Tobin’s senior year portrait in Harvard Class Album, 1939.

 

Categories
Exam Questions Harvard

Harvard. Exams from Principles of Economics. Day, Davis, Burbank et al., 1917-18

 

 

For most students who go on to concentrate in economics, the principles of economics course is the first contact with the discipline. Like they say, you have only one try to make a first impression. We’ll see in a coming post that Taussig’s textbook Principles of Economics still served as the backbone of the Harvard principles course twenty years later.

________________________

Course Description

INTRODUCTORY COURSES
Primarily for Undergraduates

[Economics] A. Principles of Economics. , Th., Sat., at 11. Asst. Professor Day and Dr. Davis, Dr. Burbank and Messrs. P. G. Wright, Monroe, Lincoln, and Van Sickle.

Course A gives a general introduction to economic study, and a general view of Economics for those who have not further time to give to the subject. It undertakes an analysis of the present organization of industry, the mechanism of exchange, the determination of value, and the distribution of wealth.

The course is conducted partly by lectures, more largely by oral discussion in sections. Taussig’s Principles of Economics is used as the basis of discussion.

Course A may not be taken by Freshmen without the consent of the instructor.

 

Source: Division of History, Government, and Economics. 1917-18. Official Register of Harvard University, Vol. XIV, No. 25 (May 18, 1917) p. 58.

________________________

Course Enrollment

[Economics] A. Asst. Professor Day and Asst. Professor J. S. Davis, Dr. Burbank, Mr. Monroe, and Dr. E. E. Lincoln.—Principles of Economics.

Total 258: 1 Graduate, 8 Seniors, 73 Juniors, 150 Sophomores, 3 Freshmen, 23 Other.

 

Source: Harvard University. Report of the President of Harvard College, 1917-18, p. 53.

________________________

1917-18
HARVARD UNIVERSITY
ECONOMICS A
Mid-year Final Examination

Plan your answers carefully before writing. Write concisely. Arrange your answers strictly in the order of the questions, beginning each on a new page.

  1. What is labor? To what extent is it irksome? How, if at all, is the irksomeness of labor to be minimized?
  2. Explain “producers’ surplus.” Under what conditions of cost does it arise? How is monopoly profit to be distinguished from producers’ surplus? Illustrate throughout by diagram.
  3. “Before the war started the bullion value of the U.S. silver dollar, measured in gold, was about 42c. At this rate it took 37 ounces of silver to equal one of gold. Today [October, 1917], with silver bullion at about $1.00 an ounce, the value of a silver dollar is 77c., a ratio of about 20 to 1. It would only take another advance such as occurred within the last month for silver to reach the U.S. coinage ratio of ‘16 to 1.’”
    In this case what would happen, and why? Would the consequences be objectionable? If so, on what grounds? If not, why not?
  4. Explain briefly: (a) commercial banking; (b) “deposits as currency”; (c) bank reserves; (d) Federal Reserve notes; (e) Gold Settlement Fund.
  5. Analyze the factors contributing to the present “high cost of living.”
  6. “The nations of the world should adopt a uniform system of currency with a common standard. This would do away with all this bother about ‘par of exchange,’ ‘gold points,’ ‘rate of exchange,’ etc.”
    To what extent is this conclusion warranted? Explain.
  7. To what extent does the following offer a solution of the tariff problem?
    “In all tariff legislation the true principle of protection is best maintained by the imposition of such duties as will equal the difference between the cost of production at home and abroad.”
  8. Comment briefly upon the following:
    “During the days and weeks and months ahead there must be no cessation or lessening of effort on the part on any one of us—man or woman—to keep business healthy and normal.
    “Industries of every kind must be maintained to their fullest capacity. Money must be kept in circulation. There must be no hysterical, misguided retrenchment, masquerading under the cloak of economy.
    “The nation calls for every encouragement and support that the commercial and industrial forces can supply—and that means everybody doing his bit to keep business booming.”

 

Source: Harvard University Archives. Department of Economics, Course reading lists, syllabi, and exams 1913-1992 (UA V 349.295.6). Box 1, Folder “Economics I, Final Exams 1913-1939”.

________________________

 1917-18
HARVARD UNIVERSITY
ECONOMICS A
Year-end Final Examination

Plan your answers carefully before writing. Write concisely. Arrange your answers strictly in the order of the questions, beginning each on a new page.

  1. What factors tend to limit the extension of (a) large-scale production in agriculture? (b) large-scale production in manufacture? (c) large-scale management, or industrial combination?
  2. Explain briefly: (a) demand; (b) decreasing cost; (c) internal economies; (d) “dumping.”
  3. State carefully: (a) Gresham’s law; (b) the law of diminishing returns; (c) the law of monopoly price; (d) Malthus’s law of population.
  4. To what extent and for what reasons should taxes be employed in financing the present war?
  5. In what respects are business profits like, in what unlike, (a) wages? (b) rent?
  6. What practical expedients would you suggest for raising the wages of workers in the lowest social group?
  7. Discuss the following contention: “One objection to having the state pay people when they are ill or old or out of work is that it saps that personal initiative and prudence and foresight which lie at the basis of an orderly civilization.”
  8. What grounds are there for saying that under a socialistic régime the efficiency of the rank and file of workers would be (a) greater? (b) less?

 

Source: Harvard University Archives. Department of Economics, Course reading lists, syllabi, and exams 1913-1992 (UA V 349.295.6). Box 1, Folder “Economics I, Final Exams 1913-1939”.

Categories
Exam Questions Harvard

Harvard. Introductory Economics. Mid-Year and Final Exams, 1938-39

 

A supplementary bibliography for Harvard’s introductory economics course along with the enrollment data were transcribed for the previous post. The final exams for both semesters of this two semester course are transcribed below. A transcription of the first multiple-choice exam for introductory economics at Harvard (1948!) has also been posted.

_______________________

1938-39
HARVARD UNIVERSITY
ECONOMICS A
Mid-year Final Examination

Choose and SIX questions

  1. “Large-scale production and the modern corporation have rendered obsolete such concepts as private property, free enterprise and individual initiative.” Do you agree?
  2. “The only thing which has kept large business units from crowding out small units in every part of the economic system has been the willingness of the small operators to stand continual losses in order to retain their independence.” Discuss.
  3. “The principal function of commercial bank credit is to make unnecessary the physical transfer of metallic and paper money. Commercial banks merely hold balances in the form of these types of money for a depositor and enable him to transfer claims to this money to other depositors.” Do you agree? Explain fully.
  4. “Assume that Congress had voted that the ‘Federal Reserve Board be commissioned to stabilize the price level.’” How, would you suggest, should the Federal Reserve Board go about it?
  5. Because of unsettled political conditions abroad, the pickup of general business conditions here, and the undervaluation of the dollar relative to other currencies, there has been lately a steady influx of gold into this country.
    1. Discuss the adjustments you would expect to take place if the so-called automatic gold standard were in effect.
    2. Discuss the adjustments possible under a managed gold standard.
  6. What would be the effect on prices and output of a lowering of the price of the raw materials used in a purely competitive industry? Discuss from the short and long run point of view.
  7. “A single department store carries 19 toothpastes and 15 toothpowders, which are only a fraction of the total varieties of these articles. That this is wasteful and uneconomical is beyond argument, but it would not be so easy to prove it keeps up the price of toothpaste in general. The very competition in these items of which we see evidence in all national advertising probably tends in the other direction.” Discuss.

 

 

1938-39
HARVARD UNIVERSITY
ECONOMICS A
Year-End Final Examination

I

(One hour and one-half.)

Write on BOTH of the following in this section. Choose either ONE as a subject for an hour essay, marking it as such.

  1. “Defenders of the competitive system rest their case upon the operation of a price system which secures the optimum utilization of the factors of production. This point of view, however, completely ignores the realities of the situation.” Discuss.
  2. “Business spending depends upon business prospects; business prospects depend upon consumer expenditures; but consumer expenditures depend upon business spending. Thus we face a dilemma from which there is no escape.”

 

II

Write on any THREE of the following:

  1. “The fact that there are ten million unemployed is sufficient evidence that our population is too large. A gradually declining population is to be welcomed rather than feared, since it would in time eliminate the unemployed surplus.” Discuss.
  2. “The rate of wages in a particular plant depends mainly on the bargaining strength of the workers and the employer. The workers can therefore always raise their wages by organizing into a trade union.” Discuss.
  3. “The free traders would have us turn the whole earth into one free market, with the result that the standard of living in every nation would in time become approximately equal. Thus although the ‘have-not’ nations would be better off, this would be because of a corresponding sacrifice on the part of the ‘have’ nations. The protective tariff protects our standard of living.” Discuss.
  4. “Of one thing we can be sure, any tax on land cannot be shifted.” Discuss.
  5. “It is a truism that demand and supply determine the rate of interest. The important thing is to know what factors affect the demand for and supply of capital.” Discuss.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder “Econ A”. Also in Harvard University Archives. Department of Economics, Course reading lists, syllabi, and exams 1913-1992, Box 1, Folder “Economics I: 1939-1962”.

 

 

 

Categories
Courses Harvard Suggested Reading

Harvard. Introductory Economics. Supplementary Readings, 1938-39

 

 

__________________________

…Economics A is required for admittance into every advanced course, although there are a few which allow it to be taken at the same time. It is by no means too difficult for Freshmen, may be taken by them with the consent of the instructor, and concentrators urge all Freshmen who think they may go into the field to take this course during their first year. This will enable them to begin taking advanced courses their Sophomore year, as History and Government concentrators do, and thereby allow a much wider range of study during their last two years, both in courses and in tutorial. History 1 and Government 1 are both required for concentration in Economics. The former should be taken Freshman year….

Source: Articles on Fields of Concentration Harvard Crimson, May 31, 1938.

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SUPPLEMENTARY READINGS FOR ECONOMICS A
Harvard University
1938-39

This bibliography has been prepared by members of the Economics A staff to supplement the assigned reading on the subject matter of the course. A division has been made in the reading: Part A listings are works and selections of a more general character, while those of Part B include more specialized or more advanced material. Students will also find the Encyclopedia of the Social Sciences a valuable source of information on the various topics.

Introduction and Historical Background.

A

Johnson, E. A. J., Some Origins of the Modern Economic World.

Kaempfert, W., A Popular History of American Inventions (2 vols.).

Kirkland, E. C., A History of American Life, pp. 246-339.

Lipson, E., The Economic History of England, Vol. I, pp. 347-390.

Lynd, R. and H., Middletown; and Middletown in Transition.

Mantoux, P. The Industrial Revolution in the Eighteenth Century, pp. 193-346.

Myers, G., History of Great American Fortunes.

See, Henri, Modern Capitalism.

Usher, A. P., The Industrial History of England, pp. 314-366.

Warshow, H. T., Representative Industries in the United States.

B

Bober, M. M., Karl Marx’s Interpretation of History.

Cole, A. H., The American Wool Manufacture, pp. 86-136, 219-244.

Fraser, C.E., and Doriot, G. F., Analyzing Our Industries.

Kautsky, Karl, The Class Struggle, pp. 7-87.

Usher, A. P. History of Mechanical Inventions, pp. 1-31.

 

II. Institutions.

A

Adams, C. F., Chapters on the Erie.

Arnold, T., Folklore of Capitalism.

Berle, A., and Means, G. C., The Modern Corporation and Private Property.

Hunt, B., History of Joint-Stock Corporation in England.

Laski, H. J., Rise of Liberalism.

National Resources Committee, Recent Technical Changes.

Robinson, E. A. G., Structure of Competitive Industry.

Strachey, John, The Coming Struggle for Power.

B

Dewing, A. S., Corporation Finance.

Hammond, J. L., and B., Rise of Modern Industry.

Fortune Magazine, Nov. 1936, “The United States Steel Corporation.”

Steffens, L., Autobiography.

Tarbell, Ida, History of the Standard Oil Company.

Twentieth Century Fund, Big Business, Its Growth and Its Place.

 

III. Money, Banking and International Finance.

A

Bradford, F. A., Money and Banking.

Burgess, W. R., The Reserve Banks and the Money Market (1936 ed.).

Ely, R. T., Outlines of Economics.

Feaveryear, A. E., The Pound Sterling.

King, W. T. C., History of the London Discount Market.

Meade, J. E., An Introduction to Economic Analysis and Policy, Parts I and V.

Meyers, M. G., The New York Money Market.

Moulton, H. G., The Financial Organization of Society.

Robertson, D. H., Money.

White, H., Money and Banking (Historical Sections)

B

Catterall, R. C. H., The Second Bank of the United States.

Currie, L., The Supply and Control of Money in the United States.

Federal Reserve Bulletins and Annual Reports.

Gayer, Arthur, Monetary Policy and Economic Stabilisation;  Lessons in Monetary Experience.

Hawtrey, R. G., The Art of Central Banking.

Keynes, J. M., A Treatise on Money, Vol. I, Chs. 2, 9-14.

 

IV. Value Theory.

A

Burns, A. R., The Decline of Competition, Chs. I, III, V, VIII.

Gray, Alexander, Development of Economic Doctrine.

Henderson, H. D., Supply and Demand, Chs. I-V.

Marshall, A., Principles of Economics, Book I, Chs. I, II, III; Book IV, Chs. III, XIII; Book V, Chs. III, V.

Meade, J. E., Introduction to Economic Analysis and Policy, Part II, Chs. I-IV.

B

Cassels, John, “Law of Variable Proportions,” Explorations in Economics, pp. 223-236.

Chamberlin, E., Theory of Monopolistic Competition.

Crum, Leonard, Rudimentary Mathematics for Economists and Statisticians (Quarterly Journal of Economics Supplement, May, 1938).

Keynes, J. M., “Alfred Marshall 1842-1924, “ Memorial of Alfred Marshall, A. C. Pigou editor, pp. 1-66.

Mill, J. S., Autobiography.

Robbins, Lionel, The Nature and Significance of Economic Science.

Robinson, Joan. Economics of Imperfect Competition, pp. 1-92.

Smith, Adam, Wealth of Nations, Book I, Chs. I-III.

 

V. Price Policy and Public Authority.

A

Black, J. D., Agricultural Reform in the United States.

Dennison, H. S., and Galbraith, J. K., Modern Competition and Business Policy.

Ezekiel, M., and Bean, L. H., Economic Bases for the A.A.A.

Hamilton, Walton H., and Others, Price and Price Policies.

Jones, Eliot, Trust Problem in the United States.

Jones, Eliot, and Bigham, T. C., Principles of Public Utilities.

Locklin, D. P., Economics of Transportation.

Mosher, W. E., and Crawford, F. G., Public Utility Regulation.

Lyons, L. S., and Others, The National Recovery Administration.

Nourse, E. G., Davis, J. S., and Black, J. D., Three Years of the A.A.A.

President’s Committee on Industrial Analysis, Report on the N.R.A.

Ripley, W. Z., Main Street and Wall Street.

Seager, H. R., and Gulick, C. A., Jr., Trust and Corporation Problems.

Watkins, M. W., Industrial Combinations and Public Policy.

B

Bauer, J., and Gold, N., Public Utility Valuation.

Cabinet Committee on Cotton Textile Industry, Report, Senate Document 126, 74th Congress, 1st

Daugherty, C. R., de Chazeau, M. G., and Stratton, S. S., Economics of the Iron and Steel Industry.

Wallace, Donald, Market Control in the Aluminum Industry.

Watkins, M. W., Oil: Stabilization or Conservation.

 

VI. Wages and Population.

A

Adamic, Louis, Dynamite.

Brooks, R., When Labor Organizes.

Carver, T. N., Distribution of Wealth, Ch. IV.

Henderson, H. D., Supply and Demand, Ch. IX.

Hicks, J. R., Theory of Wages, Ch. I-V.

Malthus, Thomas, Principles of Population (2nd).

Marshall, Alfred, Principles of Economics.

Taussig, F. W., Principles of Economics, Vol. II, Chs. 47, 48.

Walsh, J. R., I.O., Industrial Unionism in Action.

Wright, H., Population.

B

Millis, H. A., and Montgomery, R. E., Labor Progress and Some Basic Labor Problems (3 vols.).

National Resources Board, Problems of a Changing Population.

Perlman, S., History of Trade Unionism in the United States, Part I.

Perlman, S., and Taft, P., History of Labor in the United States 1896-1932, especially Section 4.

Robertson, D. H., Economic Fragments, “Wage Grumbles.”

Webb, S., and B., History of Trade Unionism, Chs. 1, 2, 7, 8.

Witte, E. E., The Government in Labor Disputes, Chs. 1, 2, 5, 6, 9, 13.

 

VII. Interest.

A

Fisher, Irving, Capital and Income, Chs. 1-6; Theory of Interest.

Henderson, H. D., Supply and Demand, Ch. VIII.

Taussig, F. W., Principles of Economics, Vol. II, Chs. 38-40.

B

Böhm-Bawerk, Eugen v., Positive Theory of Capital, Books 1, 2, 5, 6, 7.

Hansen, A. H., Full Recovery or Stagnation, Ch. 1 “Review of J. M. Kenyes’s General Theory etc.”

Keynes, J. M., General Theory of Employment, Interest, and Money, 13-17.

Schumpeter, J. A., The Theory of Economic Development.

Wicksell, Knut, Lectures on Political Economy, pp. 101-218.

 

VIII. Rent.

A

Carver, T. N., The Distribution of Wealth, Ch. V.

Fetter, F. A., Economic Principles, Vol. I, Part II, pp. 89-158.

George, Henry, Progress and Poverty.

Henderson, H. D., Supply and Demand, Ch. VI.

B

Marshall, Alfred, Principles of Economics, Book IV, Chs. 2, 3; Book V, Chs. 8-11; Book VI, Chs. 9, 10.

Monroe, A. E., Value and Income, Chs. V, VI, VII.

Ricardo, David, Principles of Political Economy, Chs. 2, 3; “Influence of a Low Price of Corn on the Profits of Stock,” E. C. K. Gonner, Economic Essays by David Ricardo.

 

IX. Profits.

A

Berle, A., and Means, G. C., Modern Corporation and Private Property, Book IV.

Carver, T. N., Distribution of Wealth, Ch. 7.

Henderson, H. D., Supply and Demand, Ch. VII.

Marshall, Alfred, Principles of Economics (8th), Book VI, Ch. 8.

B

Gordon, R. A., “Enterprise, Profits, and the Modern Corporation,” Explorations in Economics.

Knight, Frank, Risk, Uncertainty and Profits, Chs. 2, 9, 10.

Schumpeter, J. A., Theory of Economic Development, Chs. I-IV.

Veblen, Thorstein, Theory of Business Enterprise.

 

X. International Trade and Tariff.

A

Beveridge, Sir Wm., Tariffs: The Case Examined.

Ellsworth, P., International Economics.

Hansen, Alvin H., Commission of Inquiry on Naitonal Policy in International Economic Relations.

Harrod, R. F., International Economics.

Killough, U. B., International Trade.

Salter, Sir Arthur, Recovery, the Second Effort.

Smith, A., Wealth of Nations, Book IV.

Taussig, F. W., Tariff History of the United States; Readings in International Trade and Tariff Problems; Some Aspects of the Tariff Question.

Wallace, Henry, America Must Choose.

Whale, B., International Trade.

B

Delle Donne, O., European Tariff Policies.

Haberler, Gottfried, The Theory of International Trade.

Macmillan Report, Addendum III (Keynes)

Ohlin, Bertil, Interregional and International Trade.

Page, T. W., Making the Tariff in the United States.

Ricardo, David, Principles of Political Economy, Chs. VII, XIX, XXII.

 

XI. Public Finance

A

Clark, J. M., The Economics of Planning Public Works.

Gayer, Arthur, Public Works in Prosperity and Depression.

Gayer, Hansen et al, “Recent Depression and Public Works and Taxation,” New Republic Supplement, Feb. 1938.

Keynes, J. M., Means to Prosperity.

Robinson, M. E., Public Finance.

B

Bullock, C. J., Readings in Public Finance.

Colwyn Report, Great Britain: Report of the Committee on National Debt and Taxation, 1927.

Fagan, Elmer, and Macy, C. W., Public Finance: Selected Readings.

Lutz, H. L., Public Finance (third edition)

National Industrial Conference Board, Cost of Government in the United States 1935-37.

Silverman, H. A., Its Incidence and Effects.

Stamp, Sir J., Fundamental Principles of Taxation (second edition)

Twentieth Century Fund, Facing the Tax Problem.

 

XII. Business Cycles and Social Reform.

A

Cole, G. D. H., Principles of Economic Planning.

Ely, R. T., Outlines of Economics, Ch. 17.

Fisher, Allan, Clash between Progress and Security.

Hansen, Alvin H., Economic Stabilization in an Unbalanced World.

Meade, J. E., Introduction to Economic Analysis and Policy, Part I.

Mitchell, W. C., “Description of Cycle,” in Moulton, H. G., Financial Organization of Society.

Pigou, A. C., Socialism vs. Capitalism.

Robbins, L., The Great Depression.

Simons, H., Positive Program for Laissez-faire.

Wooton, B., Plan or No Plan.

B

Clark, J. M., Strategic Factors in the Business Cycle.

Haberler, G., Prosperity and Depression.

Hansen, Alvin H., Full Recovery or Stagnation; Business Cycles.

Keynes, J. M., General Theory of Employment, Interest, and Money.

Pigou, A. C., Economics in Practice; Economics of Welfare.

Robinson, Joan, Introduction to the Theory of Employment.

 

Source: Duke University. David M. Rubenstein Rare Book and Manuscript Library. Economists’ Papers Archive. Lloyd Appleton Metzler Papers, Box 9, Folder “Econ. A”.

 

 

Categories
Harvard Radical Seminar Speakers Suggested Reading

Harvard. Critical Spirit in Economics, Grad student symposium, 1968

 

Fished out of miscellaneous items filed chronologically under the label “Harvard University Department of Economics” in John Kenneth Galbraith’s papers is the following early outline for a symposium organized by the Graduate Economics Club for the month of May, 1968. Faculty were invited to join in the discussions by the president of the Graduate Economics Club, David M. Gordon (New York Times obituary: March 19, 1996). I have yet to confirm whether any or all of the four Friday afternoon sessions actually took place. John Kenneth Galbraith sent his regrets less than a week before a session that was to consider the reception of the New Industrial State. Samuel Bowles and Herbert Gintis were on the program that also included Hilary Putnam, a philosopher of science.

_______________________

Dear faculty member,

The Graduate Economics Club is sponsoring a series of discussion during the month of May, emphasizing certain broad questions of critical perspective in economic theory.

It is our hope that these discussions will initiate and promote an open discussion and exchange of ideas among students and faculty.

Enclosed you will find an outline of the first few of these round-table discussion. Central to the success of these discussions is the participation of the faculty. We cordially invite your attendance.

All meetings will be held in Littauer, the room to be announced.

Sincerely,

Graduate Economics Club,
Dave Gordon, Pres.

_______________________

THE CRITICAL SPIRIT IN ECONOMICS

  1. The Myth of an Objective Economics: The Separation of Positive and Normative Thought.
    Friday, May 3, 2:00 – 4:00.

    1. The Ideological Element in Conceptualization and Model-Building: Professor Hilary Putnam.
      Professor Putnam, a philosopher of science and logician at Harvard, will speak on the contributions of T. S. Kuhn and Karl Popper, after which the discussion will be opened to the group.
      Readings are (starred items are most important):

      1. *T. S. Kuhn, The Structure of Scientific Revolutions, esp. chap. 2, 4, 10, 12, 13. (72 pages)
      2. *Karl Popper, The Logic of Scientific Discovery, I, II; esp. pp. 27-30, 32-34, 40-42.
      3. *Karl Marx, A Contribution to the Critique of Political Economy, Author’s Preface (Xerox, pp. 9-15).
      4. *Milton Friedman, “The Methodology of Positive Economics,” in Essays in Positive Economics.
      5. Stephen Toulman, The Philosophy of Science, chap. 2, pp. 17-56.
      6. Michael Polanyi, Personal Knowledge, chap. 2, pp. 18-32.
      7. Pratt, Raiffa and Schlaiffer, Introduction to Statistical Decision Theory, Appendix A3, esp. A3.4.
    2. Examples from Economic Literature: These readings are meant to illustrate points made in the above readings:
      1. *Roy Harrod, “Scope and Method in Economics”, Economic Journal, Sept., 1938.
      2. *Oscar Lange, “Marxian Economics and Modern Economic Thought”, Review of Economic Studies, June, 1935.
      3. *Robert Solow, “Son of Affluence”, The Public Interest, Fall, 1967.
      4. *Robin Marris, review of Galbraith’s New Industrial State, Am. Econ Review, March, 1968, pp. 240-247.
  2. Paradigms in Development Economics
    Friday, May 10, 2:00 – 4:00

    1. Tensions, Preferences and Economic Development: Sherman Robinson.
      1. *Sherman Robinson, “Tensions, Preferences and Development”, Xerox in Littauer Library.
      2. *Gunnar Myrdal, Prologue to Vol. I of Asian Drama.
    2. Development paradigms
      1. *H. Chenery, “Comparative Advantage and Development Policy”, AER, March, 1961. Reprinted in Surveys of Economic Theory, AEA
      2. *Paul Baran, “On the Political Economy of Backwardness”, in Agarwala and Singh
      3. Gunnar Myrdal, Economic Theory and Underdeveloped Regions, chap. 2, “The Principle of Circular and Cumulative Causation,” and chap. 6, “National State Policies in Under-Developed Countries.”
    3. The Relevance of Economic Theory to Economic Development: Prof. Samuel Bowles.
      1. *Gunnar Myrdal, op. cit., chap. 4, “The Role of the State” and chap. 5 “International Inequalities”
      2. *Hla Myint, “Classical Theory of International Trade and the Underdeveloped Countries”, Economic Journal, June 1958, reprinted in Readings in Economic Development, T. Morgan, 1963.
      3. Hla Myint, “The Gains from International Trade and the Backward Countries”, REStud., 1954-55, pp. 29-42.
      4. Mason, Economic Planning in Underdeveloped Areas, chap. 2, sections 2, 5.
      5. Lenin, Imperialism.
      6. *Hobson, The Evolution of Modern Capitalism, chap. X, sections 9, 10.
      7. *Aron, Peace and War, Part II, chap. IX, “On Resources”, pp. 243-278.
  1. Welfare Economics and the Value of Efficiency Criteria: Herb Gintis.
    May 17, Friday, 2:00 – 4:00
    Professor A. Bergson has kindly agreed to participate.
    Readings to be Announced.
  1. The Role of the State in Economic Theory
    Friday, May 24, 2:00 – 4:00.
    Speakers and readings to be announced.

_______________________

Carbon Copy of Galbraith’s response

April 29, 1968

Mr. Dave Gordon
Graduate Economics Club
Littauer Center M-8

Dear Mr. Gordon:

Unhappily I will be in Italy on May 3rd, so I will not be able to attend the round-table discussion on that day. I am sorry.

Yours faithfully,

John Kenneth Galbraith

 

Source: John F. Kennedy Presidential Library. Papers of John Kenneth Galbraith, Series 5. Harvard University File, 1949-1990. Box 526, Folder “Harvard University Department of Economics: General Correspondence, 1967-1974 (3 of 3)”.

Image Source: David M. Gordon in Harvard Class Album, 1964.

Categories
Exam Questions Harvard

Harvard. Graduate core economic theory exams and enrollments. Taussig, 1926-30

 

 

Examination questions spanning just over a half-century can be found in Frank Taussig’s personal scrapbook of cut-and-pasted semester examinations for his entire Harvard career. Up to the time when Schumpeter took over the core economic theory course from Taussig in 1935, Taussig’s course covering economic theory and its history was a part of almost every properly educated Harvard economist’s basic training. Taussig’s exam questions have been previously posted for the academic years 1886/87 through 1889/90 along with enrollment data for the course;  material for this course (including semesters when taught with/by other instructors) from 1890/91 through 1893/94; 1897-1900 ; 1904-1909 ; 1911-14 ; 1915-1917; 1918-1919 ; 1920-22 ; 1923-25 have been posted as well.  

This post begins with the printed course description from 1929-30 then adds the enrollment data and five years of semester final examinations for the years 1925-26 through 1929-30.

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 Course Description
1929-30

11. Economic Theory.

Mon. , Wed., Fri., at 2. Professor Taussig

Course 11 is intended to acquaint the student with the development of economic thought since the beginning of the nineteenth century, and at the same time to train him in the critical consideration of economic principles. The exercises are conducted mainly by the discussion of selected passages from the leading writers; and in this discussion the students are expected to take an active part. A careful examination is made of the writings of Ricardo and J. S. Mill, and of representative modern economists.

 

Source:  Division of History, Government, and Economics, 1929-30. Official Register of Harvard University, Vol. XXVI, No. 36 (June 27, 1929), p. 71. Identical course description found in Official Register of Harvard University, Vol. XXV, No. 29 (May 26, 1928), p. 70.

____________________________________

1925-26

 

Course Enrollment: Economics 11
1925-26

[Economics] 11. Professor Taussig.—Economic Theory

Total 50: 36 Graduates, 5 Graduate Business, 2 Seniors, 6 Radcliffe, 1 Other.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1925-26, p. 77.

 

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Final Exam
1925-26

Arrange your answers in the order of the questions

  1. “The ordinary bargain between labor and capital is that the wage-receiver gets command over commodities in a form ready for immediate consumption, and in exchange carries his employer’s goods a stage further towards being ready for immediate consumption. But while this is true of most employees, it is not true for those who finish the processes of production. For instance, those who put together and finish watches, give to their employers far more commodities in a form ready for immediate consumption, than they obtain as wages. And if we take one season of the year with another, so as to allow for seed and harvest time, we find that workmen as a whole hand over to their employers more finished commodities than they receive as wages.”
    Do you see anything to criticize in this?
  2. (a) “In estimating the exchangeable value of stockings, for example, we shall find that their value, comparatively with other things, depends on the total quantity of labour necessary to manufacture them and bring them to market. First, there is the labour necessary to cultivate the land on which the raw cotton is grown; secondly, the labour of conveying the cotton to the country where the stockings are to be manufactured, which includes a portion of the labour bestowed in building the ship in which it is conveyed, and which is charged in the freight of the goods; thirdly, the labour of the spinner and the weaver; fourthly, a portion of the labour of the engineer, smith, and carpenter, who erected the buildings and the machinery. . . . The aggregate sum of these various kinds of labour determines the quantity of other things for which these stockings will exchange.”
    (b) “Suppose one man employs one hundred men for a year in the construction of a machine, and another man employs the same number of men in cultivating corn. . . .
    Suppose that for the labour of each workman £50 per annum were paid, or that £5000 capital were employed and profits were 10 per cent, the value of the machine as well as of the corn, at the end of the first year, would be £5500. The second year the manufacturer and farmer will again employ £5000 each in the support of labour, and will therefore again sell their goods for £5500; but the man using the machine, to be on a par with the farmer, must not only obtain £5500 for the equal capital of £5000 employed on labour, but must obtain a further sum of £550 for the profit on £5500, which he has invested in machinery, and consequently his goods must sell for £6050. Here, then, are capitalists employing precisely the same quantity of labour annually on the production of their commodities, and yet the goods they produce differ in value on account of the different quantities of fixed capital, or accumulated labour, employed by each respectively.”Is Ricardo’s reasoning tenable, on his own premises, in both cases? Are the premises the same in both?
  3. “To popular apprehension it seems as if the profits of business depend on prices. A producer or dealer seems to obtain his profits by selling his commodity for more than it costs him. . . . Demand — customers — a market for the commodity, are the cause of the gain of the capitalist.” What would Mill say to this? Ricardo?
  4. The effective desire of accumulation; the rate of profits as dependent on the cost of labor; the tendency of profits to a minimum, — are the doctrines of Mill on these topics consistent with each other? With what Ricardo laid down?
  5. “The cost of production [of agricultural produce] on the margin of the profitable application of capital and labour is that to which the price of the whole produce tends, under the control of the general conditions of demand and supply; it does not govern price, but it focusses the causes which do govern price.” Explain what Marshall means. Does the doctrine differ from Mill’s on the same subject?
    Would Marshall’s conclusion be applicable to a manufactured commodity which is produced under the conditions usually indicated by cost-accountants’ data (a supply curve positively inclined)?
  6. Suppose a decrease in the demand for a commodity produced with much fixed capital: what consequences would you expect on the equilibrium of supply and demand, price, quasi-rent, cost. Consider both the short period and the long period effects.
  7. Wherein, if at all, is the conception of quasi-rent applicable to

“Capital sunk in the soil”;
Pullman, Saltaire, and the like cases;
The gains of pioneers settling in a new country.

  1. What is meant by a law of increasing return? Do you believe there is one as regards “external economies”? internal economies?

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Year-end Final Exam
1925-26

Arrange your answers in the order of the questions

  1. Define, with the utmost brevity consistent with accuracy, producers’ surplus; consumers’ surplus; savers’ surplus. What writers do you associate with the concepts to which these terms refer?
  2. “When the artisan or professional man has once obtained the skill required for his work, a part of his earnings are for the future really a quasi-rent of the capital and labour invested in fitting him for his work, in obtaining his start in life, his business connections, and generally his opportunity for turning his faculties to good account; and only the remainder of his income is true earnings of effort. But this remainder is generally a large part of the whole. And here lies the contrast. For when a similar analysis is made of the profits of the business man, the proportions are found to be different: in his case the greater part is quasi-rent.”Is the greater part of the earnings of business men to be regarded as quasi-rent? Is only the remainder to be regarded as true earnings of effort? Are these propositions in accord with Walker’s doctrine concerning business profits?
  3. What sort of surplus, if any, arises from the operation of diminishing returns as regards (a) increasing output secured from land; (b) increasing output secured with the aid of additional instruments made by man?
  4. The resemblance or difference between Clark’s doctrine that “abstinence is confined to the genesis of new capital,” and the reasoning of later writers concerning the significance of the surplus accounts of corporations.
  5. “‘On the whole,’ says Marshall, ‘it happens that by far the greater number of the events with which economics deals affect in about equal proportions all the different classes of society; so that if the money measures of the happiness caused by two events are equal, there is not in general any very great difference between the amounts of the happiness in the two cases.’ This has been justly characterized as a cavalier dismissal of the effect of differences of wealth and differences in sensibility.”Why a cavalier dismissal? or why not? Consider whether the criticism holds good as regards Marshall’s reasoning on the effects of taxes and bounties.
  6. (a) “As the inquiry to which I wish to draw the reader’s attention relates to the effect of the variations in the relative value of commodities, and not in their absolute value, it will be of little importance to examine into the comparative degree of estimation in which the different kinds of human labour are held. We may fairly conclude that whatever inequality there might originally have been in them, whatever the ingenuity, skill, or time necessary for the acquirement of one species of manual dexterity more than another, it continues nearly the same from one generation to another; or at least that the variation is very inconsiderable from year to year, and therefore can have little effect, for short periods, on the relative value of commodities.”
    Is this a cavalier dismissal of the relation between differing rates of wages and the value of goods?(b) “Although general wages, whether high or low, do not affect values, yet if wages are higher in one employment than another, or if they rise and fall permanently in one employment without doing so in others, these inequalities do really operate upon values. . . . When the wages of an employment permanently exceed the average rate, the value of the thing produced will, in the same degree, exceed the standard determined by mere quantity of labour. Things, for example, which are made by skilled labour, exchange for the produce of a much greater quantity of unskilled labour; for no reason but because the labour is more highly paid.” Mill.What would Marshall say to this? Böhm-Bawerk? What is your own view?
  7. Is there essential difference between the doctrine that the general level of wages is determined by the discounted marginal product of labor, and Clark’s doctrine concerning the relation between wages and the product of labor?
  8. “It is not true that the spinning of yarn in a factory, after allowance has been made for the wear-and-tear of the machinery, is the product of the labour of the operatives. It is the product of their labour, together with that of the employer and subordinate managers, and of the capital employed; and that capital itself is the product of labour and waiting: and therefore the spinning is the product of labour of many kinds, and of waiting. If we admit that it is the product of labour alone, and not of labour and waiting, we can no doubt be compelled by inexorable logic to admit that there is no justification for Interest, the reward of waiting; for the conclusion is implied in the premiss.”(a) What would Böhm-Bawerk say to this? What is your own view?
    (b) What is the premiss which is implied in the conclusion?

____________________________________

1926-27

 

Course Enrollment: Economics 11
1926-27

[Economics] 11. Professor Taussig.—Economic Theory

Total 44: 38 Graduates, 3 Graduate Business, 2 Seniors, 1 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1926-27, p. 75.

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Examination
1926-27

[Arrange your questions in the order of the answers]

  1. The merits and defects of Walker’s treatment of distribution.
  2. The merits and defects of Ricardo’s treatment of value.
  3. The merits and defects of Mill’s treatment of profits.
  4. What is meant by “increase of demand” in the following passages: —
    (a) “The democratization of society and the aping of the ways of the well-to-do by the lower classes have greatly increased the demand for silk fabrics.”
    (b) “ The lower price of sugar after 1890, when sugar was admitted free of duty, at once caused an increase of demand.”
    (c) “The cheapening of a commodity may mean an increase of demand such that the total sum spent on it will be as great as before, even greater than before.”
  5. Describe the supply curves indicated by accountants’ figures for the costs of agricultural and of manufactured products; and explain wherein they confirm or fail to confirm traditional “laws of value” applicable to the two classes of goods.
  6. (a) “Were it not for this tendency [to diminishing returns] every farmer could save nearly the whole of his rent by giving up all but a small piece of his land, and bestowing all his labor and capital on that. If all the labor and capital which he would in that case apply to it gave as good a return in proportion as that he now applies to it, he would get from that plot as large a produce as he now gets from his whole farm; and he would make a net gain of all his rent save that of the little plot that he retained.”
    (b) “The return to additional labour and capital [applied to land] diminishes sooner or later; the return is here measured by the quantity of the produce, not by its value.”
    (c) “Ricardo, and the economists of his time generally were too hasty in deducing this inference [tendency to increased pressure] from the law of diminishing return; and they did not allow enough for the increase of strength that comes from organization. But in fact every farmer is aided by the presence of neighbours, whether agriculturists or townspeople. . . . If the neighbouring market town expands into a large industrial centre, all his produce is worth more; some things which he used to throw away fetch a good price. He finds new openings in dairy farming and market gardening, and with a larger range of produce he makes use of rotations that keep his land always active without denuding it of any one of the elements that are necessary for its fertility.”
    Have you any criticisms or qualifications to suggest on these passages from Marshall?
  7. “For periods which are long in comparison with the time needed to make improvements of any kind, and bring them into full operation, the net incomes derived from them are but the price required to be paid for the efforts and sacrifices of those who make them; the expenses of making them thus directly enter into marginal expenses of production, and take a direct part in governing long-period supply price. But in short periods, that is, in periods short relatively to the time required to make and bring into full bearing improvements of the class in question, no such direct influence on supply price is exercised by the necessity that such improvements should in the long run yield net incomes sufficient to give normal profits on their cost. And therefore when we are dealing with such periods, these incomes may be regarded as quasi-rents which depend on the price of the produce.”
    Precisely what is meant by “these incomes”?

 

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Year-end Final Examination
1926-27

Arrange your answers in the order of the questions

  1. What is the difference, if any, between

supply prices and expenses of production;
successive costs and contemporaneous costs;
demand curves and utility curves?

  1. Would you reckon economic rent among the expenses of production of a commodity? business profits?
    Would you reckon them among the costs of production?
  2. “‘Rent is not an element in price’ — such is the classical statement on the subject. . . . But if one defines rent as product imputable to a concrete agent, the impossibility of maintaining such a claim becomes apparent. Even if one were to restrict the term rent to the product created by land, the claim that it is not an element in adjusting market values would be absurd; for it would amount to saying that a certain part of the output of every kind of goods has no effect on their market value. The ‘price’ referred to in the formula is, of course, the market value expressed in units of currency.” What do you say?
  3. “That capital is productive has often been questioned, but no one would deny that tools and other materials of production are useful; yet these two propositions mean exactly the same when correctly understood. Capital consists primarily of tools and other materials of production, and such things are useful only in so far as they add something to the product of the community. Find out how much can be produced without any particular tool or machine, and then how much can be produced with it, and in the difference you have the measure of its productiveness.”
    What would Böhm-Bawerk say to this? J. B. Clark? What is your own view?
  4. Böhm-Bawerk remarks that the theory which he has put forward bears “a certain resemblance” to the wages fund theory of the older English School, but differs from it in various ways, one of which is “the most important.” What are the points of resemblance? and what is this “most important” difference?

Questions 6 and 7 may be treated as one, if you prefer; and questions 8 and 9 may also be so treated.

  1. “It may well be asked whether a method [of measuring utility] that needs so much guarding and explaining is worth adopting at all. The answer is that the principle of the declining marginal significance is fundamental. The doctrine of surplus value in the thing bought, over and above the value of the price paid, is an inevitable deduction from it.” Do you agree?
  2. Adventitious utility, conspicuous waste, consumer’s surplus, organic welfare. How are these related? or not related?
  3. Ricardo’s theory of cost of production is so expressed as almost to invite misunderstanding. In consequence there is a widely spread belief that it has needed to be reconstructed by the present generation of economists. . . . On the contrary the foundations of the theory as they were left by Ricardo remain intact; much has been added to them and very much has been built upon them, but little has been taken from them. He knew that demand played an essential part in governing value, but he regarded its action as less obscure than that of cost of production, and therefore passed it lightly over in the notes which he made for the use of his friends, and himself; for he never essayed to write a formal treatise: he regarded cost of production as dependent — not, as Marx asserted him to have done, on the mere quantity of labor used up in production, but — on the quality as well as quantity of that labor; together with the amount of stored up capital needed to aid labor, and the length of time during which such aid was invoked.” Do you agree?
  4. “The incomes which are being earned by all agents of production, human as well as material, and those which appear likely to be earned by them in the future, exercise a ceaseless influence on those persons by whose action the future supplies of these agents are determined. There is a constant tendency towards a position of normal equilibrium, in which the supply of each of these agents shall stand in such a relation to the demand for its services, as to give to those who have provided the supply a sufficient reward for their efforts and sacrifices. If the economic conditions of the country remained stationary sufficiently long, this tendency would realize itself in such an adjustment of supply to demand, that both machines and human beings would earn generally an amount that corresponded fairly with their cost of rearing and training, conventional necessaries as well as those things which are strictly necessary being reckoned for.”
    Is this in accord with Ricardo’s view? with Mill’s view? with Cairnes’s? What is your own opinion?

____________________________________

1927-28

Course Enrollment: Economics 11
1927-28

[Economics] 11. Professor Taussig.—Economic Theory

Total 56: 43 Graduates, 2 Graduate Business, 6 Seniors, 1 Junior, 4 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1927-28, p. 75.

 

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Final Examination
1927-28

Arrange your answers strictly in the order of the questions

  1. Wherein is there resemblance, wherein difference, between Walker’s long-run theory of wages and Cairnes’s?
  2. “Ricardo’s theory of cost of production is so expressed as almost to invite misunderstanding. In consequence there is a widely spread belief that it has needed to be reconstructed by the present generation of economists….On the contrary the foundations of the theory as they were left by Ricardo remain intact; much has been added to them and very much has been built upon them, but little has been taken from them. He knew that demand played an essential part in governing value, but he regarded its action as less obscure than that of cost of production, and therefore passed it lightly over in the notes which he made for the use of his friends, and himself; for he never essayed to write a formal treatise: he regarded cost of production as dependent—not, as Marx asserted him to have done, on the mere quantity of labor used up in production, but—on the quality as well as quantity of that labor; together with the amount of stored up capital needed to aid labor, and the length of time during which such aid was invoked.”
    Do you agree?
  3. What is the short period view, what the long period view (1) of Mill as regards the level of wages; (2) of Marshall as regards differences of wages in different occupations?
  4. Does Marshall conclude that money costs of production measure real costs of production? that value is ultimately determined by a constant supply price?
  5. “An increase in the aggregate volume of production will generally increase the size, and therefore the internal economies possessed by a representative firm; it will always increase the external economies to which the firm has access; and then will enable it to manufacture at a less proportionate cost of labour and sacrifice than before.”
    Why? or why not?
  6. Explain the criticisms or objections to the notion of consumer’s surplus which have been urged on the ground of (a) inequalities of income, (b) “esteem value” or “adventitious value,” (c) identity in the yield of satisfaction from each constituent of a given stock. Which among these objections if any, tell strongly against Marshall’s suggestion regarding the use of taxes and bounties?
  7. “The extra income derived from rare natural abilities bears a closer analogy to the surplus produce from the holding of a settler who has made an exceptionally lucky selection, than to the rent of land in an old country.”
    Why? or why not?
  8. (a) “The deepest and most important line of cleavage in economic theory” is “the distinction between the quasi-rents which do not, and the profits which do, directly enter into the normal supply prices of produce for periods of moderate length.” Marshall.
    (b) A critic has remarked: “In that which is most characteristic, original and positive in his work, Professor Marshall has left the old concept of rent far behind. The logical consequence of his treatment is that all the division fences between the different sorts of material wealth have been leveled; and that rent is the income of an material agent….”
    What have you to say?

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Year-end Final Examination
1927-28

 

  1. Explain in the briefest terms

Expenses of Production.
Opportunity Cost.
“Cost” as used by Cairnes.
“Cost” as used by Marshall.
“Cost” as used by Böhm-Bawerk.

  1. What do you conceive to be meant by “pure profits”? and what is the place of pure profits in the theory of cost and value?
  2. “‘Rent is not an element in price’ — such is the classical statement on the subject. It even expresses a view that is now prevalent. The expression itself however, is vague. It seems to mean that the fact of rent plays no part in the adjustment of values, and that things would exchange for one another in exactly the ratios in which they now do, if there were no such thing as rent. But if one defines rent as product imputable to a concrete agent, the impossibility of maintaining such a claim becomes apparent. Even if one were to restrict the term rent to the product created by land, the claim that it is not an element in adjusting market values would be absurd; for it would amount to saying that a certain part of the output of every kind of goods has no effect on their market value. The ‘price’ referred to in the formula is, of course, the market value expressed in units of currency.”
    What do you say?
  3. Resemblances and differences between the “discounted marginal product” theory of wages and the specific product theory.
  4. “Interest under Socialism” as discussed by Böhm-Bawerk.
  5. What are “fair wages,” in Marshall’s view? Clark’s? Böhm-Bawerk’s? Your own?

____________________________________

1928-29

Course Enrollment: Economics 11
1928-29

 

[Economics] 11. Professor Taussig.—Economic Theory

Total 39: 28 Graduates, 1 Graduate Business, 1 Senior, 1 Junior, 8 Radcliffe.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1928-29, p. 72.

 

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Final Examination
1928-29

Answer the questions in the order in which they are put; and answer them all, distributing your time accordingly.

  1. It had been maintained by Adam Smith and others that:
    (1) profits are lowered by the mutual competition of merchants;
    (2) taxes on necessaries cause money wages to rise;
    (3) a rise in money wages means a rise in all prices;
    (4) taxes on wages lessen farmer’s profits, and thus lower rent.
    What would Ricardo say under each head?
  2. It has been said by German writers that there is a certain degree of truth in the wages fund doctrine, in that the capital of employers is the immediate source from which wages come; but the ultimate source is in the incomes of consumers. What would Ricardo say to this? Walker? your own view?
  3. In the familiar diagram representing conditions of increasing costs for an agricultural commodity, does the supply curve indicate expenses of production or “real costs” of production?
    In a similar diagram for a manufactured commodity, based on accountants’ figures of costs, does the supply curve indicate expenses or “real costs”?
    Are the two curves different in meaning, or do they indicate essentially the same situation?
  4. “We have next to study the conditions of business management; and in so doing we must have in view a problem that will occupy our attention as we go on. It arises from the fact that, though in manufacturing at least every individual business, so long as it is well managed, tends to become stronger the larger it has grown; and though prima facie we might therefore expect to see large firms driving their smaller rivals completely out of many branches of industry, yet they do not in fact do so.”
    What is Marshall’s solution of the problem thus stated by him?
  5. “That part of a man’s income which he owes to the possession of extraordinary natural abilities is a free boon to him; and from an abstract point of view bears some resemblance to the rent of other free gifts of nature, such as the inherent properties in land. But in reference to normal prices, it is to be classed rather with the profits derived by free settlers from the cultivation of new land, or again with the find of the pearl-fisher.”
    On what grounds does Marshall rest this conclusion? What would Walker say to it?
  6. How, if at all, did Mill modify Adam Smith’s conclusions on the causes of the differences of wages in different employments? Cairnes modify Mill’s? Marshall modify Cairnes’s?
  7. “It might be supposed at first thought that . . . the area above the horizontal line (in the usual diagram) represents consumers’ surplus. This is not exactly true, however, and that for two reasons. In the first place, the satisfaction of additional wants which a lower price makes possible may make the more important wants less intense. A man might be willing to give ten dollars for a cord of wood in order that at least one room in his house could be heated during the winter. He might also be willing to give seven dollars a cord for two cords, so as to heat two rooms, but the heating of the second room might render the heating of the first room less important to him. He might not be willing, for example, to give ten dollars plus seven dollars in order to have the two rooms heated. In the second place, utility itself is to a large extent affected by price. So far as our purchases satisfy what has been called the desire for distinction, or represent what Thorstein Veblen has termed ‘conspicuous consumption,’ a lowering of the price of a commodity would lessen its utility to us.”
    Give your opinion on these objections; and consider which of them, if either, would necessarily tell against Marshall’s suggestion concerning bounties and taxes.

 

HARVARD UNIVERSITY
ECONOMICS 11
Year-end Final Examination
1928-29

 

Arrange your answers in the order of the questions.
Two questions may be omitted.

  1. Resemblances and differences between Ricardo and Boehm-Bawerk.
  2. The following have been suggested, by one writer or another, as the grounds on which the distinction between interest and rent turns:
    (1) Land is fixed in amount, instruments made by man are not.
    (2) Competition equalizes the return on instruments made by man but not that on land.
    (3) The returns on land and instruments alike depend on marginal productivity.
    Examine critically but briefly each statement; and give your own view.
  3. Would interest necessarily persist in a socialist state? The rent of land?
  4. “Quasi-rents are the net profits made in years of exceptionally good trade, or by business men of exceptional natural ability.”
    “Business profits are the net return secured in years of exceptionally good trade, or by business men of exceptional natural ability.”
    Do you agree in either case?
  5. (a) “The output of the least efficient producers forms part of the total output whose magnitude helps to determine price. But to argue from this that there is some special relation between price and the costs of the least efficient producers is a complete non sequitur.”
    (b) “‘ Rent is not an element in price’ — such is the classical statement on the subject. It even expresses a view that is now prevalent. The expression itself, however, is vague. It seems to mean that the fact of rent plays no part in the adjustment of values, and that things would exchange for one another in exactly the ratios in which they now do, if there were no such thing as rent. But if one defines rent as product imputable to a concrete agent, the impossibility of maintaining such a claim becomes apparent. Even if one were to restrict the term rent to the product created by land, the claim that it is not an element in adjusting market values would be absurd; for it would amount to saying that a certain part of the output of every kind of goods has no effect on their market value. The ‘price’ referred to in the formula is, of course, the market value expressed in units of currency.”
    What is your opinion?
  6. Are there important distinctions between these propositions:
    (a) Wages are determined by the specific product of labor;
    (b) Wages are determined by the imputed product of labor;
    (c) Wages are determined by the discounted marginal product of labor.
  7. “It is evident that, if the supply [of labor] is increased, whether the increase comes about through an addition to the number of workpeople or through an addition to their average capacity, the national dividend must be increased. Our problem is to ascertain the effect that will be produced upon the aggregate real income of labour. The analysis set out in the preceding section shows that the marginal net product of labour, in terms of things in general, and, therefore, its real earnings per unit, must be diminished. Whether its aggregate earnings will be increased depends, therefore, on whether the elasticity of the demand for labour in general is greater or less than unity. If this elasticity is greater than unity, labour in the aggregate will receive a larger absolute quantity of dividend than before; whereas, if the elasticity is less than unity, it will receive a smaller absolute quantity. It is, therefore, necessary to determine whether in fact the elasticity of demand is greater or less than unity.” Do you agree? and what is your conclusion on the elasticity of demand for labor?
  8. Compare Hobson’s analysis of “costless” savings with that of other recent writers.

____________________________________

1929-30

Course Enrollment: Economics 11
1929-30

[Economics] 11. Professor Taussig.—Economic Theory

Total 53: 44 Graduates, 3 Seniors, 5 Radcliffe, 1 Other.

 

Source: Harvard University. Reports of the President and Treasurer of Harvard College, 1929-30, p. 78.

 

 

 

HARVARD UNIVERSITY
ECONOMICS 11
Mid-year Final Examination
1929-30

Arrange your answers in the order of the questions. Answer ALL the questions.

  1. “The ordinary bargain between labour and capital is that the wage-receiver gets command over commodities in a form ready for immediate consumption, and in exchange carries his employer’s goods a stage further towards being ready for immediate consumption. But while this is true of most employees, it is not true for those who finish the process of production. For instance, those who put together and finish watches, give to their employers far more commodities in a form ready for immediate consumption, than they obtain as wages. And if we take one season of the year with another, so as to allow for seed and harvest time, we find that workmen as a whole hand over to their employers more finished commodities than they receive as wages.”
    What do you say to this? and what is its bearing on the questions raised by George and Walker?
  2. “This principle of the division of the produce of labour and capital between wages and profits, which I have attempted to establish, appears to me so certain, that excepting in the immediate effects, I should think it of little importance whether the profits of stock or the wages of labour, were taxed. . . . A tax on wages does not fall on the landlord, but it falls on the profits of stock: it does not ‘entitle and oblige the master manufacturer to charge it with a profit on the prices of his goods,’ for he will be unable to increase their price, and therefore he must himself wholly and without compensation pay such a tax.”
    What led Ricardo to the conclusions stated in this passage?
  3. (a) “As the inquiry to which I wish to draw the reader’s attention relates to the effect of the variations in the relative value of commodities, and not in their absolute value, it will be of little importance to examine into the comparative degree of estimation in which the different kinds of human labour are held. We may fairly conclude that whatever inequality there might originally have been in them, whatever the ingenuity, skill, or time necessary for the acquirement of one species of manual dexterity more than another, it continues nearly the same from one generation to another; or at least that the variation is very inconsiderable from year to year, and therefore can have little effect, for short periods, on the relative value of commodities.”
    (b) “Although general wages, whether high or low, do not affect values, yet if wages are higher in one employment than another, or if they rise and fall permanently in one employment without doing so in others, these inequalities do really operate upon values. . . . When the wages of an employment permanently exceed the average rate, the value of the thing produced will, in the same degree, exceed the standard determined by mere quantity of labour. Things, for example, which are made by skilled labour, exchange for the produce of a much greater quantity of unskilled labour; for no reason but because the labour is more highly paid.” Mill.
    What would Cairnes say about the proposition here laid down? What would Marshall say? What are your own opinions?
  4. Consider whether marginal cost determines price, or price determines marginal cost, in the following cases:
    (a) the short-period price of a manufactured commodity;
    (b) the short-period (seasonal) price of an agricultural commodity;
    (c) the long-period price of a manufactured commodity;
    (d) the long-period price of an agricultural commodity;
    (e) the long-period value of gold.
  5. Describe the supply curves (particular costs curves) which we have for agricultural products; indicate what they signify; and indicate also in what principles and in what manner such curves should be constructed in order to make them fit into the “orthodox” reasoning about the rent of land, or to serve as test or verification for that reasoning.
  6. (a) “The deepest and most important line of cleavage in economic theory” is “the distinction between the quasi-rents which do not, and the profits which do, directly enter into the normal supply prices of produce for periods of moderate length.”
    (b) A critic has remarked: “In that which is most characteristic, original and positive in his work, Professor Marshall has left the old concept of rent far behind. The logical consequence of his treatment is that all the division fences between the different sorts of material wealth have been levelled; and that rent is the income of any material agent. . . .”
    Why should Marshall consider the line of cleavage explained in (a) to be the most important? If he does, must he admit the “logical consequence” stated in (b)?
  7. “Curves of total satisfaction are purely abstract; that is to say, they represent the subjective value attached by a consumer to each increment of the commodity, or the amount he would purchase at any given price, apart from any consideration of the causes that might be supposed in actual experience to limit his supply or raise the price of the commodity, and apart from all reactions upon the price or other commodities. They are also isolated; that is to say, we cannot conceive of a system of such curves being so constructed as to be valid simultaneously. Nor can we sum their areas, taken successively, without omitting some values and counting others more than once. Nor can we read on them the effect of a rise or fall in the consumer’s income. Nevertheless their general form has a high theoretical significance. . . .
    It may well be asked whether a method that needs so much guarding and explaining is worth adopting at all. The answer is that the principle of declining marginal significances is absolutely fundamental. The doctrine of surplus value in the thing bought over and above the value of the price paid, is an inevitable deduction from it.”Explain, and give your own views.

 

HARVARD UNIVERSITY
ECONOMICS 11
[Year-end Final Examination]
1929-30

Arrange your answers in the order of the questions.

  1. Explain briefly,

Simple Competition
Monopolistic Competition
Bilateral Monopoly
Simple Monopoly
Discriminating Monopoly

  1. What is the elasticity of demand for labor, on the reasoning of the Wages Fund doctrine? on that of Böhm-Bawerk? on that of Pigou? What is your own view?
  2. What are “pure profits”? and what would be “impure” profits? Can you distinguish? If so, how and why?
  3. “That able but wrongheaded man, David Ricardo, shunted the car of Economic Science on to a wrong line, on which it was further urged toward confusion by his equally able and wrongheaded admirer John Stuart Mill.”
    “Ricardo’s theory of cost of production is so expressed as almost to invite misunderstanding. In consequence, there is a widely spread belief that it has needed to be reconstructed by the present generation of economists. . . . On the contrary the foundations of the theory as they were left by Ricardo remain intact; much has been added to them and very much has been built upon them, but little has been taken from them.” Marshall.
    What ground for either view?
  4. Give the rest of your time — at least one hour — to a discussion of The Universal Law of Diminishing Returns.

 

 

Source for examination questions: Harvard University Archives. Prof. F. W. Taussig, Examination Papers in Economics 1882-1935 (Scrapbook).

Image Source:  Harvard Class Album, 1934.