Category: M.I.T.

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Chicago Economists Funny Business M.I.T. Undergraduate

Chicago. Paul Samuelson’s 50th Class Reunion Questionnaire, 1985

For his 50th class reunion Paul A. Samuelson filled out the following one page questionnaire. Besides revealing the youthful musical taste of this Chicago educated Wunderkind, Samuelson’s responses sometimes even illustrate his writing style (e.g. 7 8/9 grandchildren). I was most struck by his declared favorite professor during these formative years. Guess, then read.

____________________________________

CLASS OF 1935 SURVEY

Your former classmates are interested in what you’re doing.

 

Name Paul A. Samuelson                Maiden Name [blank]

Address MIT E52-383

City/State/Zip Code Cambridge, MA 02139

Your past and present occupation and employer Professor of Economics, Massachusetts Institute of Technology

Anything you wish to mention about your job Overpaid/underworked

Spouse’s name and occupation Risha Samuelson, Painter

No. of children 6       No. of grandchildren 7 8/9            No. of great-grandchildren [blank]

Degrees received and institutions attended AB U of C 1935; AM 1936, Ph.D. Harvard 1941, 2 dozen honorary degrees, including Chicago

Favorite class and professor at the University, and why Henry Simons, Economics! Great economist, great person.

Most rewarding, exciting, or unusual experience as a student Being reborn as a scientist-scholar

Most memorable moments since graduation Nobel Prize, 1970; birth of triplets, 1953; first-born, 1946

Favorite song or band of the ‘30s Wayne King, Hal Kemp, Paul Whiteman

Other affiliations (clubs, professional associations, political parities) [blank]

Have you received any civic, community, or academic honors? Yes

Accomplishments, interests, hobbies that you find especially significant Tennis

Future plans Economic writing

Please share any other information that your classmates may find interest I was given a great education, in the Midway’s golden age

 

Please return this form by April 15, 1985. You may attach an additional sheet if needed. Mail to: Reunion ’85 Network, 5757 S. Woodlawn Avenue, Chicago, IL 60637

[pencil note: Sent 2/22-85]

 

Source: David M. Rubenstein Rare Book & Manuscript Library, Duke University. Paul A. Samuelson Papers, Box 4, Folder “Personal”.

Image Source:  Henry Calvert Simons. University of Chicago Photographic Archive, apf1-07614, Special Collections Research Center, University of Chicago Library.

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Exam Questions M.I.T.

MIT. Final Examination in 2nd Core Microeconomics. Martin Weitzman, 1974

The theory core at MIT in the mid-1970s consisted of four half-semester courses in microeconomics and four half-semester courses in macroeconomics. For reasons unknown to me, Microeconomic Theory I (A) taught by Martin Weitzman was scheduled to follow Microeconomic Theory II (A) taught by Robert Bishop for the First Term of 1974-75. I guess I should really say, there was no good reason not to simply reverse the numbering of the courses since Weitzman’s course was in most respects the more advanced of the two. The course featured the economic intuition behind some “quick and dirty bankers’ calculations”, an introduction to linear models, and the first essay of Koopmans’ Three Essays on the State of Economic Science.

_______________________

Microeconomic Theory I (A)

14.121 December 1974                 Final Exam                M. Weitzman

Instructions:

  1. Be sure you have picked a number and identify yourself by that number only on each blue book you use.
  2. Try to answer any three out of the following six questions.
  3. Complete answers on all three questions are not required for passing. Two well answered questions would easily be enough to pass, for example.
  4. Total time: one and a half hours.
  5. Answer each question in a separate blue book.
  6. Try to be concise and to the point. Wordiness is not going to help anyone.

 

  1. Explain carefully why the following three features of the American economy lead to productive inefficiency. Say what might be done to rectify the inefficiency.
    1. water pollution
    2. existence of “free” fishing grounds.
    3. the fact that the price of certain raw materials (Like natural gas) is artificially suppressed.
  1. Suppose there are a total of I tasks to be accomplished. A limited number of labor saving machines are available to help out. Task i can be performed by using ai units of labor alone, or bi (< ai) units of labor along with ei machines, or the appropriate combination. There are a total of M machines available.
    1. Formulate the problem of using the available machines to minimize the amount of labor required to perform the tasks.
    2. Describe the optimal solution.
    3. What is the value or shadow price of an extra machine? Show directly that minimizing shadow costs at shadow prices yields the right answer.
  1. A particular “two-armed” model of a drill-press can be worked by either one or two operators. With one operator it produces U units of output per unit time; with two operators it produces V units per unit time.
    1. With L laborers and M machines available, describe precisely how to calculate how many machines should be operated by one worker and how many by two in order to maximize output. What is the marginal rate of substitution between machines and laborers? (Hint: Try to get an answer using “common sense.” If that doesn’t work, draw isoquants.)
    2. Suppose total output is fixed in the long run. As many machines can be rented and workers hired as desired at the going rates. How do you decide whether it is better to operate machines with one or with two laborers?
    3. In the short run the number of machines is fixed but as many workers as desired can be hired at the going wage rate. The output is variable. How is the short run supply of output schedule determined?
  1. There are two farm plots, A and B. Both have identical production functions. If x units of labor is applied to A (or to B) it results in f(x) units of output. A total of L units of labor is available for application to both farm plots.
    1. Formulate the planning problem of allocating labor to A and to B so as to maximize total output from both farms when a total of L units of labor are available.
    2. Assuming f’(x) > 0, f”(x) < 0, characterize exactly the solution to problem (a) above and show why it is optimal.
    3. Show directly that there is an efficiency price of labor relative to output which supports the optimal solution of (b).
    4. Assuming f’(x) > 0, f” > 0, characterize exactly the solution to problem (a) above. Does (c) hold now? Why or why not?
  1. A firm or economy consists of a number of divisions or subsectors. There are no externalities. From first principles, prove rigorously the following result: If each subsector is maximizing profits at the same positive prices, the firm’s overall mixture of inputs and outputs is being efficiently produced.
  1. Suppose modern low-cost shell housing is made according to the following production formula:

H = (A + T)αL1-α

A,T,L ≥ 0

Where H is housing, A is aluminum, T is tin, and L is labor. Tin is produced by a perfect competitor, so there is free entry into the tin industry. One unit of labor produces a unit of tin. Aluminum, on the other hand, is a monopolistic industry which can charge any price it wants to, and can restrict entry. One unit of labor produces b > 1 units of aluminum. The aluminum, tin, and housebuilding industries have competitive labor supplies. For simplicity, suppose that the total budget of all the housebuilders is fixed and aluminum has no other uses.

a. What will be the competitive price of tin? The monopoly price of aluminum? Why?

b. What input mix will the home builders select and why?

c. Referring to question (b), are houses being produced efficiently? Why or why not? Give as precise an answer as you can. If you find that houses are produced inefficiently, give the efficient way to produce them.

 

Source: Personal copy of Irwin Collier.

Image Source: Detail from 1976 MIT economics department group picture.

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Chicago Economic History M.I.T.

MIT. Search for an Economic Historian. 1942

In this 1942 letter from the head of the Industrial Relations Section of the M.I.T. Department of Economics and Social Science, W. Rupert Maclaurin, to the economic historian Earl J. Hamilton of Duke University, we see that hiring a young economic historian was part of the plan “to build one of the leading departments in the country”. Professor Davis Rich Dewey retired in 1940. Courses in economic history were taught in the late 1940s by Karl Deutsch and then by Walt Rostow beginning in 1950. (See Peter Temin, The Rise and Fall of Economic History at MIT, History of Political Economy, Volume 46, Number suppl. 1: 337-350. Earlier and downloadable at MIT Economics Working Paper 13-11, June 5, 2013.)

____________________________

 

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
INDUSTRIAL RELATIONS SECTION

Department of Economics and Social Science
CAMBRIDGE, MASSACHUSETTS

APRIL 8, 1942

W. Rupert Maclaurin
Douglas McGregor
Barbara Klingen Hagen
Beatrice A. Rogers

Douglass V. Brown
Dwight L. Palmer
Charles A. Myers
Paul Pigors

Professor Earl J. Hamilton
Department of Economics
Duke University
Durham, North Carolina

Dear Professor Hamilton:

            At the suggestion of Dr. Arthur Cole I am writing to ask if you know a really promising young man in the field of economic history who might be eligible for an opening that we have here at M. I. T.

            Various members of our Department of Economics are initiating a series of studies which are designed to be of assistance in post-war reconstruction in the United States. These studies are being undertaken with the cooperation of industry and the government, as part of a larger program designed to analyze some of the basic, longer-range problems facing this country. Our group at M. I. T. will be concerned particularly with analyses of the opportunities for industrial development in the post-war world and some of the hindrances and restrictions which have been inhibiting development in the past.

            As part of this general research program, and also of our plans for developing this Department, we would like very much to bring in a promising young economic historian who would be interested in making some historical studies in the general field of industrial development. We should like someone who would co-operate with the “Committee on Research in Economic History” of which Dr. Cole is chairman.

            The administration at M. I. T. is anxious to build up the Departments of Economics and History. These two departments now come under Dr. Robert Caldwell, professor of history and dean of humanities. Whoever we brought in would divide his time to some extent between the Department of History and the Department of Economics.

            Our Economics Department is undergoing substantial change and expansion at the present time, and we are attempting to build one of the leading departments in the country. There should therefore be significant opportunities for professional advancement for promising young men. We started last year a graduate program leading to a Ph.D. degree in industrial economics, and by next year we shall have a group of about twenty graduate students in this Department, primarily on a fellowship basis, from all over the country.

            I know this is a hard time to find talent. We should only be interested in some young man who has an attractive personality, energy, and creative imagination. For this particular position here there is no point in our considering anybody who is not A. We are thinking of a young man under thirty-five who would come to us as an instructor or an assistant professor. The teaching load would be light, and we could arrange for travelling expenses and other research facilities.

            The whole problem of selective service is a very difficult one to deal with under present conditions. As an engineering school with a research program in economics that is closely associated with a number of the leading government agencies in Washington, there is at least a good [chance that the local*] draft boards would grant deferment to a promising instructor in economic history here.

            If you have any suggestions to make, I should greatly appreciate hearing from you.

Yours sincerely,

[signed]
W. Rupert Maclaurin

[*A fold in the letter here covers all but the very top (sometimes bottoms) of the first four words so that I have suggested an interpolation consistent with what I see.]

 

Source: Duke University, Rubenstein Library, Earl J. Hamilton Papers, Box 2, Folder “Correspondence—Misc, 1930’s-1960s and n.d.”.

Image Source: (left) W. Rupert Maclaurin, from MIT Technique, 1944.; (right) Earl J. Hamilton (1937) from John Simon Guggenheim Memorial Foundation website.

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Economists M.I.T.

MIT. Suggestions for New Fields. Domar, Kuh, Solow, Adelman, 1967

The following set of memoranda from the MIT economics department is found in a folder marked “Correspondence: Peter Temin” in Evsey Domar’s papers. The bulk of the material in the folder are letters of support that Domar solicited for the committee he chaired (which consisted of Domar, Charles Kindleberger and Frank Fisher) to review Peter Temin for tenure. It thus appears that Domar’s proposal to strengthen economic history at MIT in February 1967 was seen (at least by him) to have led later to granting Peter Temin tenure at MIT. See Peter Temin’s reflections on “The Rise and Fall of Economic History at MIT.”

In response to a request by the Head of the department, E. Cary Brown, for input to a long-range plan (1967-1975), we have here not only Evsey Domar’s response but also memos from Edwin Kuh (more econometrics!), Robert Solow (“poverty-manpower” or “a really high-class macro-numbers man”) and M. A. Adelman (energy economics).

Even Robert Solow’s intradepartmental memos sparkle with wit!

_________________________________

February 7, 1967

MEMORANDUM

 

To: Members of the Economics Department
From: E. Cary Brown
Subject: Long-Range Departmental Plans

President H. Johnson has asked that Departments submit long-range plans – by two-year intervals through the academic year 1974-5. The basic constraints, other than budgetary, are that the undergraduate student body is to remain fixed at its present level and that graduate students at M.I.T. Grow at only a 3% rate per year. The projection desired is of the expansion in existing fields, into new fields, the population of the department – faculty, staff, students, post-doctorals, and administration and supporting staff.

In order to get a dialogue started, I suggest that each of you send me a note on the need for new fields, the expansion of existing ones, and your views about our undergraduate and graduate size. I can then prepare an agenda for a meeting or two on this matter.

_________________________________

 

[Evsey Domar response]

  1. New Fields, etc.
    1. Economic History. Could tie in very well with our economic developers. Also help to create a better balance in the Department.
    2. Economics and Technology (Mansfield, etc.) MIT should be just the place for it.
    3. I hope Max continues to be interested in South-East Asia. The US will be involved there for a long time. Any chances for a South-east. Asia Center or something?
  2. Number of Students
    No strong feelings. A larger number of both faculty and students allows us to offer a greater variety of courses.

As you know, Economic History is my main concern.

_________________________________

 

[Edwin Kuh response]

February 13, 1967

MEMORANDUM

TO:                 Professor E. Cary Brown
FROM:          Professor Edwin Kuh
SUBJECT:     Some Economics Department Needs in the Long Run

Let me first grind my own econometric axe. We need additional support in two econometric areas. The first pertains to support for quantitative theses; Frank Fisher, Bob Solow and I carry a heavy load in this connection, which is unlikely to diminish. Second, we ought to have more strength than we do in econometric time series analysis, an important topic not covered by existing faculty. Marc Nerlove, for instance, ranks high on both counts. Less senior individuals include David Grether who combines both aspects (Stanford Ph.D. going to Yale this fall) and possibly Joseph Kadane also at Yale, who is more the statistician. Jim Durbin and Bill Phillips would be fine, too, qua statisticians contributing to econometrics.

Next, suppose we are fortunate enough to attract both Ken Arrow and C. V. Wiesacker [sic] ; the net balance in favor of theory would then become heavy indeed. There will be no need to panic and for instance, proceed instantly to hire Arthur Burns. But even so, it will behoove the department to push relentlessly on expanding the more empirical side. Since all tenure slots by then will have been sewed up, I don’t see how this can readily be done.

Finally, the department ought to raise more finance for computation. The burden has been disproportionately assumed by the Sloan School, even though several Economics Department research projects have made highly welcome and substantial contributions to the installation downstairs. In this connection, the department should seriously consider acquiring the long run services of someone with a major interest [in] computer systems; very different and high qualified individuals such as Mark Eisner or Don Carroll come to mind. The department will lag behind seriously unless it expands in this direction.

This has not been a balanced presentation of needs. I shall leave that to more balanced individuals.

 

_________________________________

 

[Robert M. Solow response]

MEMORANDUM TO: E. Cary Brown, Head
FROM: Robert M. Solow
SUBJECT: Yours of February 7

 

  1. Undergraduate program. I suppose basically we just passively accept as many majors as come along. We might attract more by improving the teaching and brightening up the course offering. So far we have got along just fine with a pretty dreary undergraduate program, and previous attempts to Do Something have petered out. Is history trying to tell us something? The only reason I can think of for trying again is this: if the department faculty is going to state bigger, especially among assistant professors, then we probably need some decent undergraduate teaching for them to do. (Not only them – I would volunteer to do some too.) Why not let the assistant professors do the planning – they probably have more ideas. Suggestions: new undergraduate subjects in mathematical economics, econometrics, “poverty”, transportation (or public investment); cancel one of the current Labor subjects (or convert to “poverty”), maybe cancel 14.06, 14.09; organize research seminar on one-big-project basis; keep 3 or 4 of the best seniors on as PhD candidates as a matter of course.
  1. Graduate program. Does it have to expand to justify slightly enlarged faculty? If so, then accept universe, but fight like hell for adequate space, scholarships, research funds. If not, think carefully. If faculty enlarges and improves, we should be able to do better on admissions. There will always be some lemons admitted; but it is a question whether one would not prefer current size of enrollment with improved bottom half to enlarged enrollment with current quality. If we get Arrow and Weizsäcker, and keep half-dozen assistant professors, some growth of graduate student body probably inevitable. But I’d keep it slow, and in line with admission quality, space, scholarships, research money. Aim for entering class of 40 by 1975? Certainly no more.
  1. New fields. If MIT goes into Urban Studies, I think we ought to move too. This means some joint research, perhaps offering a few fellowships specifically in urban economics, some new appointments (transportation, poverty, local finance), probably young guys. (I’d like to see Mike Piore and Frank Levy free to start something.) (Would Bill Pounds like to hire Joe Kershaw?) Maybe we ought to start looking next fall. This complex could be a major counterweight to theory. We could make a senior appointment, but I doubt we could find a good enough man. We also lack a really high-class macro-numbers man – like Art Okun or Otto Eckstein or George Perry. Should we try Les Thurow? Or try eventually for Steve Goldfeld? Goldfeld would help with Money, but Thurow would fit into poverty-manpower bit. I think I might seriously favor going for Thurow now if we can afford it.

_________________________________

 

[M. A. Adelman response]

March 16, 1967

Memorandum to:     Professor E. Cary Brown
From:                         M.A. Adelman
Subject:  President H. W. Johnson’s request to submit long-range plans: industrial organization field

  1. Enrollment in the graduate course has declined to the point where it is best given in alternate years. Theses written have not decreased, and there are six now in preparation. I wish to use the time made available to teach the course on energy economics when Paul Rodan retires. The remaining time is best devoted to undergraduate teaching (see below).
  2. Undergraduate enrollment seems to be on the increase in 14.02, 14.04, and 14.22. With the appointment of Robert Crandall, we are fully staffed. I would wish to have 14.02 taught exclusively by lecture and sections (teaching assistants) except where the undergraduates’ program will not permit it. Where we are compelled to fill in with three-recitation sections, I strongly urge that they should not be taught by teaching assistants. Since the transfer to lectures economizes manpower, these two changes should be offsetting, but will take more of my own time.
  3. I have given a joint seminar with Harvard (Economics Department and Middle East Center) on Eastern Hemisphere Oil, and will repeat it next year. It is still an uncertain venture, however, in a sensitive area, and the fuss about CIA influence in academic research may kill it.
  4. I join in concern over our weakness in economic history. East European economics might best be treated as an expansion of our current offering in Soviet economics, since there is sufficient unity of geography and practice. I wish some encouragement could be given to East Asian especially Japanese studies, where English sometimes suffices, but would not care to have it as a field of specialization.

 

Source: Duke University, Rubenstein Library. Evsey D. Domar papers, Box 7, Folder “Peter Temin” [apparently misfiled].

Image Source: MIT 1959 Technique (Yearbook).

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Economists Irwin Collier M.I.T.

MIT. Samuelson at the Joint Economic Committee, 1973

Marina v.Neumann Whitman and Paul A. Samuelson

Backstory:

When I was an undergraduate I was extremely fortunate to have received an internship at the Council of Economic Advisers in Washington, D.C. Even though I was anything but a Republican and the semester-long internship began less than three months after the bungled Watergate break-in at the Democratic National Committee by the White House “plumbers”, I eagerly grabbed this opportunity when it was offered in August, 1972 to begin that September. I was assigned to two labor market economists, one of whom (June O’Neill) would be tasked to write chapter 4 “The Economic Role of Women” in the 1973 Annual Report of the CEA and for which I did all the tabulations and number-crunching at a time when research assistants at the Council had Wang calculators on their desks that were tethered to an “electronic package” with a data hose but that did possess the virtue of calculating logarithms (!) with a single keystroke. My bosses were sufficiently satisfied with my work that I was invited back for the Summer of 1973.

My time at the Council coincided not just with the Watergate scandal but also with some of the episode of wage-and-price controls. When concerned citizens wrote to the Council of Economic Advisers, their letters would be passed down the pecking order and most often landed on the desk of an intern to draft a polite, Econ 1 response. One of the women interns, came through the office in a rant because when she consulted Paul Samuelson’s Economics for some boiler-plate about shortages and price controls to include in a letter, she found a not untypical Samuelsonian wisecrack “Of course, there are always a few women and cranks, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.” Even though I was not even aware that I would be going to MIT myself a little more than a year later, I instinctively wanted to protect my hero, figuring my colleague consulted an old edition and times-have-changed-for-the-better. A nice thing about the Council of Economic Advisers is that it had economists of all generations in residence so that in a matter of no time we had multiple editions in which we could seek and then compare the offending passages. Indeed my intuition was correct, by the 1970 edition “women and cranks” was softened to “cranky customers” but to our procrastinating horror we discovered that the earliest edition referred to “women and soap-box orators” that was only later changed to the somewhat more offensive “women and cranks”.

Not long after this serendipitous discovery of Paul Samuelson’s personal journey in matters of gender awareness, I heard that Herbert Stein and Marina von Neumann Whitman were to testify before the Joint Economic Committee of the U.S. Congress in a set of hearings devoted to the “Economic Problems of Women” and that no less an economist than Paul Samuelson was to testify as well. I quickly wrote up a memo to my boss, June O’Neill, suggesting that perhaps this would be a cute opening remark for Marina Whitman, albeit at Samuelson’s expense, illustrating the gradual rise in consciousness of economists with respect to women’s issues.

Today’s posting includes the relevant part of Marina von Neumann Whitman’s testimony where the input from my memo can be seen. (Thank you for the memory FRASER!)

I was slightly disappointed when I read Paul Samuelson’s printed testimony, because he led off with a remark to the effect that “I am surprised, given the magnitude of the economic problems facing the United States, that the President’s Council of Economic Advisers would have the time to go back to uncover my past errors.” That statement did not get recorded in the official transcript however. My memory of his facial expression at the time was of unamused to slightly irritated. Later as a graduate student I never did have the courage to ask Samuelson if he remembered that particular moment in the hearing much less confess to my complicity.

My feeble attempt at a reparation for even providing the backstory to this Samuelson anecdote rather than mercifully allowing it to remain in the obscurity of a transcript from a JEC hearing is to place into my blog record a few paragraphs from near the end of Samuelson’s spoken testimony.

In today’s summer of the American white-male’s discontent Samuelson’s casual remarks about the differences in labor market experiences of men and women seem quite prescient. 

_______________________________

 

ECONOMIC PROBLEMS OF WOMEN

Tuesday, July 10, 1973.

Congress of the United States,
Joint Economic Committee,
Washington, D.C.

 

The committee met, pursuant to notice, at 10:12 a.m., in room S-407, the Capitol Building, Hon. Martha W. Griffiths (member of the committee) presiding.

Present: Representative Griffiths and Widnall.

[…]

Mrs. Whitman. […] In fact, this fourth chapter of the 1973 Economic Report of the President represents the first time that the report of the Council of Economic Advisers has directed considerable attention to the economic problems of women. The formation of the Advisory Committee on the Economic Role of Women is another first for the Council. The economics profession has been slow in developing expertise on the special problems of women; and Federal data sources have only begun to tailor surveys so that they can yield appropriate statistics about women. One role of the Committee is to fill in some of the deficiencies and expertise on this subject for the Council. The association of the Committee with the Council provides a channel through which the interests of women are represented in economic policy decisions.

Indeed, we are glad to observe that finally women and economics are being included in the same breath without a knowing wink by the male economist. One sign of this is the change in a passage found in various editions of Professor Paul Samuelson’s well-known economics textbook. Lamenting the popular reaction to the results of rationing, Professor Samuelson wrote in his first edition (1948):

Of course, there are always a few women and soapbox orators, who are longer on intuition than brains and who blame their troubles on the mechanism of rationing itself rather than on the shortage.

In the seventh edition (1967), we find soapbox orders dropped and the sentence is changed to:

Of course, there are always a few women and cranks, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.

By the liberated eighth edition (1970) he writes:

Of course, there are always some cranky customers, longer on intuition than brains, who blame their troubles on the mechanism of rationing itself rather than on the shortage.

So by 1970 “women” had disappeared from that rather slighting reference.

We have asked to insert into the record chapter 4 of the 1973 economic report. I would like here simply to talk about a few highlights of the chapter and primarily to report on some additional information and analysis that we have been able to acquire and develop since the economic report…

[…]

Source: United States. Congress. Ninety-Third Congress, First Session. Joint Economic Committee. Economic Problems of Women: Hearings, Part 1 (July 10, 11, and 12, 1973), p. 33.

[…]

Representative Widnall.  Mr. Samuelson, you infer in your statement and in your chapter on discrimination in the new edition of your textbook that the economic problems of women are due to “confinement to a limited group of industries and occupations within those industries.”

Could you explain what other factors you theorize to be significant in creating the female-male differential in that field?

Mr. Samuelson. We have learned about some of the detailed studies that are made to break down the different factors that explain an obviously large differential. It seems to me that these studies are excellent, the studies done by the Council of Economic Advisors, in comparison with earlier councils. It seems to me that we need more of them. But they must not have a soporific effect upon us, because, as in the case of all discrimination, there is a self-fulfilling and a self-perpetuating circle involved in discrimination. Women have less experience than men, and therefore you explain away the differential. But you have to ask yourself. “Why is the world run in such a way that the women get less experience for the good jobs?” A white male apparently is what all of Darwinian evolution has set out to create. Out of the slime came DNA, and then a backbone or something of a backbone was created, and then humans came down from the trees, and all this to create a white male. For, by census analysis of my colleague, Prof. Robert Hall, the only group who get automatic advances with age in the community, let’s say, after the age of 25, 27, 29, are white males. Women don’t get it, whether they are white or black. Black men don’t get it.

There is little good reason for a woman to have continuity in the labor force. She is given a rotten job by and large; then she leaves; and when she comes back, she again gets a rotten job. For a man, it is usually different. Only this last recession was a recession which hit MIT graduates and other professionals. As my suburban neighbors said while they were polishing their cars, why it’s people like us who have been thrown out of work. For a long time prior to that, all they had done was go through the coffee breaks and funeral by funeral move up the promotion and salary ladder. Now, that does not happen to the rest of the community. That is why, when I do an analysis of wage variance, or when Prof. Mincer does it, we pick up these same facts of discrimination once again, yes, women lack capital. The curse of the poor is their poverty. They lack human capital. Human capital is the ability to earn a large amount of money. And if you haven’t got it, you don’t earn a large amount of money. These are all attitude conditioned.

Let me give an example. It used to be said – I don’t know what the full truth was – that Jews had a bad occupational outlook in engineering. There was said to be great discrimination against them. There were very few Jews in engineering. And it was said, they are really not fitted for it. They don’t like work for pay, they like to be their own boss, probably lending money at high interest rates, and other such nonsense. And then a great change came. After World War II, in contrast to after World War I, go out to Route 128, or to Pasadena or the bay area, or Seattle, and you find that suddenly these people who previously had no human capital in that engineering-science line, no wish for it, no proclivity, no talent, they turned out to be, I would say, well represented in any random sample.

Attitude becomes self-reinforcing, and the statistics then prove for you what you already know, if you understand the attitudes involved.

So we are only talking about the visible peak of the iceberg of custom and discrimination. There have to be great changes. A 1-year change in legislation of course is only the beginning of a very long process.

 

Source: United States. Congress. Ninety-Third Congress, First Session. Joint Economic Committee. Economic Problems of Women: Hearings, Part 1 (July 10, 11, and 12, 1973), pp. 66-67.

_______________________________

 Addendum from a 1964 Oral History regarding the Council of Economic Advisers &c.

Thanks to a tip from Paul Samuelson’s biographer, Roger Backhouse, we have the following Samuelson quote that is probably as much a wise-crack aimed at a President who would appear to have confused home-economics with economics as it is an example of the way even liberal M.I.T. economists expressed themselves in the men’s locker-room. 

Samuelson. “…President Johnson made some reference to how a consumer-minded woman might be a good member of the Federal Reserve. Do you remember that, at one of the press conferences that he had? It seemed to me that in the first place one of the big issues will always be whether there will be undue concern over inflation. Women are very estimable but the Federal Reserve is not necessarily the best place for them and a consumer-minded woman would not be what the economists would generally…” [Samuelson was cut off here and the interview moved to a different topic]

Source:  Council of Economic Advisers Oral History Interview (Interviewer: Joseph Pechman. Interviewed: Walter Heller, Kermit Gordon, James Tobin, Gardner Ackley, Paul Samuelson)–JFK#1, August 1, 1964, pp. 365-6.

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ERVM M.I.T.

Correction, oops.

In my haste to post the 250th artifact, the MIT economics faculty group picture of 1976, I incorrectly identified the Associate Dean of the Sloan School. For subscribers that means you either need to note that “Abraham Siegel” and not “Jeremy Siegel” is the correct identification or go back to the posting.

Surely this is a teachable moment:  it is worth checking back if you are interested in some particular post. As a rule my post-posting corrections are done without fanfare.

 

Categories
Economists M.I.T.

MIT. Department of Economics Group Photo, 1976

Back Row:  Harold FREEMAN, Hal VARIAN, Jerome ROTHENBERG, Peter DIAMOND, Jerry HAUSMAN

4th Row: Paul JOSKOW, Anne FRIEDLAENDER, JOHN R. MORONEY (VISITOR TO DEPARTMENT)

3rd Row: Stanley FISCHER, Jagdish BHAGWATI, Rudiger DORNBUSCH, Robert SOLOW, Robert HALL

2nd Row: Edward KUH, Morris ADELMAN, Abraham J. SIEGEL, Richard ECKAUS, Martin WEITZMAN

1st Row: Evsey DOMAR, Paul SAMUELSON, Charles KINDLEBERGER, E. Cary BROWN, Franco MODIGLIANI, Sydney ALEXANDER, Robert BISHOP

1976_MITEcon_blogCopy

Apparently didn’t get the memo and/or not pictured: Michael PIORE, Frank FISHER, Peter TEMIN.

Thanks to Robert Solow, the photo-bomber standing to Solow’s left in the picture has been identified as a guest from Tulane University, John Moroney. It is possible that I forgot some other person not included in this faculty picture.

I note that the entire front row has gone to that great Department of Economics in the Cloud.

Source: A graduate student buddy of mine who entered the MIT Ph.D. program in 1975/76.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled of which this is the 250th. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

Categories
Courses M.I.T. Suggested Reading Syllabus

M.I.T. Advanced Economic Theory (Capital and growth). Solow and Phelps, 1962

Edwin Burmeister (MIT PhD, 1965) took the advanced theory course that was devoted to capital theory and economic growth during the fall term 1962-63. The course that term was co-taught by Robert Solow (2 hour 37 minute oral history interview at this link) and Edmund Phelps. Burmeister’s notes for the course are available in the Burmeister Papers at Duke University Rubenstein Library’s Economists’ Papers Project. The reading list for the course has a Part I, but I could find no corresponding part II. However, Burmeister’s notes appear to be complete otherwise so that it seems likely that Solow and Phelps wanted to divide the course into positive and normative parts with the reading list for optimal saving not ready at the start of the term.  I have inserted five titles between Parts D and E that were explicitly mentioned in the lectures but not included in the Part I reading list.

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If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled thus far. You can subscribe to Economics in the Rear-View Mirror below. There is also an opportunity for comment following each posting….

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ADVANCED ECONOMIC THEORY
14.123
Fall 1962

R. M. Solow and E. S. Phelps

 

Part I: INVESTMENT AND ECONOMIC GROWTH

A. Capital and Production

Lutz, “Essentials of Capital Theory”, The Theory of Capital (International Economic Association).

Scitovsky, T., Welfare and Competition, Chapter 9.

Lutz and Lutz, The Theory of the Investment of the Firm, Chapters 5 and 6.

Kaldor, N., Essays on Value and Distribution, Part IV.

Lange, O., “The Place of Interest in the Theory of Production”, REStud, 1935-36.

Dorfman, R., “Waiting and the Period [of] Production”, QJE, August 1959.

Robinson, “The Production Function and the Theory of Capital”, REStud, 1953-54.

Comment and Reply:

Solow, R., “The Production Function…”, REStud, 1955-56.

Robinson, Ibid.

Swan, T., Appendix to “Economic Growth and Capital Accumulation,” Ec Record, November, 1956.

Solow, R., “Substitution and Fixed Proportions in the Theory of Capital,” REStud, June, 1962.

Phelps, E., “Substitution, Fixed Proportions, Growth and Distribution,” Parts 1-3 and Appendix B only. CFDP [Cowles Foundation Discussion Paper] 133, Feb. 1962.

Samuelson, P., “The Surrogate Production Function,” REStud, June 1962.

N. & N. Ruggles, “Concepts of Real Capital Stocks and Services,” Output, Input and Productivity Measurement, No. 25 in Studies in Income and Wealth (NBER).

[handwritten addition: Wicksell, LECTURES]

 

B. Technical Change

Dickinson, H., “A Note on Dynamic Economics”, REStud, 1954-55.

Uzawa, H., “Neutral Inventions and the Stability of Growth Equilibrium,” REStud, Feb. 1961.

Fellner, W., “Two Propositions in the Theory of Induced innovation,” Econ. Journ., June 1961.

 

C. Models of Investment, Technical Progress and Growth

Johnson, H., “A Simple Joan Robinson Model of Accumulation with One Technique,” Osaka Econ. Papers, Feb. 1962.

Swan, T., “Economic Growth and Capital Accumulation,” op. cit.

Solow, R., “A Contribution to the Theory of Economic Growth,” QJE, Nov. 1956.

Pitchford, J., “Growth and the Elasticity of Factor Substitution,” Ec. Record, Dec. 1960.

Phelps, E., “Substitution, Fixed Proportions, Growth and Distribution,” CFDP [Cowles Foundation Discussion Paper] 133, Feb. 1962, Parts 4-5.

Arrow, K., “The Economic Implications of Learning by Doing,” REStud, June, 1962.

Kaldor, N., and J. Mirlees, “Growth and Obsolescence,” Ibid.

 

D. The Quantitative Importance of Investment and Technical Change for Economic Growth

Solow, R., “Technological Change and the Aggregate Production Function,” REStat, August 1957.

Masslee, B., “A Dissaggregated View of Technical Change,” JPE, Dec. 1961.

Solow, R., “Investment and Technical Progress, “Mathematical Methods in the Social Sciences, (Stanford, 1960).

Phelps, E., “The New View of Investment”, QJE, Nov. 1962.

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[Insert: Optimal problems in capital theory…beginning ca Dec. 14, 1962]

[Ramsey problem, optimal control à la Pontryagin]

von Weizsäcker, Carl Christian. Wachstum, Zins und optimale Investitionsquote. Ph.D. dissertation, University of Basel, 1961. Published in Veröffentlichungen der List Gesellschaft Bd. 26, Reiche B Studien zur Ökonomie der Gegenwart, Kyklos-Verlag, 1962

Phelps, Edmund. 1961. “The Golden Rule of Accumulation: A Fable for Growthmen”. The American Economic Review 51 (4): 638–43.

Robinson, Joan. 1962. “Comment”. The Review of Economic Studies 29 (3): 258–66.

Goodwin, R. M., 1961. “The Optimal Growth Path for an Underdeveloped Economy”. The Economic Journal,Vol. 71, No. 284: 756–74.

Chakravarty, S., 1962. “Optimal Savings with Finite Planning Horizon”. International Economic Review 3 (3): 338–55.

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E. Investment in Knowledge and Skills

Nelson, R., “The Simple Economics of Basic Scientific Research, JPE, June 1959.

Arrow, E., “The Allocation of Scientific Resources” in The Rate and Direction of Innovative Activity, (NBER).

Schultz, “Investment in Human Capital,” AER, March 1961.

 

Source: Duke University, David M. Rubenstein Rare Book & Manuscript Library. Edwin Burmeister papers, 1960-2008. Box 23.

Image Source: Robert Solow, MIT Web Museum.

Categories
Courses M.I.T. Syllabus

MIT. Course Outline of Economic Statistics. Robert Solow, 1960

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

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Robert Solow’s name is typically associated with neo-classical growth theory and MIT macroeconomics of the Keynesian persuasion. This posting reminds us that he was originally hired to beef up the statistics instruction in the MIT economics department. Like his Harvard professor Wassily Leontief, his theoretical work never really left the gravitational field of empirical economics.

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14.382 Economic Statistics (A)
Prereq.: 14.371T  [Statistical Method]
Year: G(2)                  3-0-6

Study of selected statistical techniques found useful in recent economic work, especially the regression analysis of economic time series.

Solow

Source: The Massachusetts Institute of Technology Bulletin 1959-1960. General Catalogue Issue, p. 248.

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COURSE OUTLINE
14.382
[Economic Statistics, Robert M. Solow]

Spring Semester, 1960

 

I. AGGREGATION AND INDEX NUMBERS (3 weeks)

A. Aggregation

R. G. D. Allen, Mathematical Economics, Chapter 20.

Stedman B. Noble, “Structure and Classification in Resource Flow Models”, George Washington University Logistics Research Project, May 1959.

____________________, “Resource Flow Models with Application”, delivered to the Econometric Society, December 1959.

Zvi Griliches and Y. Grunfeld, “Is Aggregation Necessarily Bad?”, The Review of Economics and Statistics, forthcoming.

E. Malinvaud, “L’agrégation dan les Modéles Économique”, Cahiers du Séminaire d’Économetrie, No. 4, 1956, pp. 69-143.

B. Index Numbers

Kenneth J. Arrow, “The Measurement of Price Change”, The Relation of Prices to Economic Stability and Growth, Joint Economic Committee Compendium, March 1958.

C. S. Carter, W. B. Reddaway and R. Stone, The Measurement of Production Movements, Cambridge University Press: England, 1948.

Federal Reserve Bulletin, “Revised Industrial Production Index”, December 1959, pp. 1451-1466.

 

II. ESTIMATION TECHNIQUES (4 weeks)

A. Small Sample Properties of Simultaneous Equation Estimators

Robert L. Basmann, “An Experimental Investigation of Some Small Sample Properties of (GCL) Estimators of Structural Equations”, November 1958 (dittoed).

_____________________, “On Finite Sample Distributions of Identifiability Test Statistics”, March 1959 (dittoed).

Harvey M. Wagner, “A Monte Carlo Study of Estimates of Simultaneous Linear Equations”, Econometrica, Vol. 26, 1958, pp. 117-133.

Robert Summers, “Capital-Intensive Approach to the Small Sample Properties of Various Simultaneous Linear Equation Estimators”, 1958 (unpublished).

Richard J. Foote, “An Experiment to Test the Relative Merits of Least Squares and Limited Information Coefficients for Forecasting Under Specified Conditions”, Analytical Tools for Studying Demand and Price Structures, 1958, pp. 128-42.

B. Specification

G. E. P. Box and Norman Draper, “A Basis for Selection of a Response Surface Design”, Journal of the American Statistical Association, September 1959.

Henry Scheffe, The Analysis of Variance, “The Effects of Departures from Underlying Assumptions”, Chapter 10, 1959.

Hans Theil, Economic Forecasts and Policy, Chapter 6.2, pp. 204-39, “Statistical Methodology”, and Appendix 6B, “Analysis of Specification Errors”, pp. 326-33.

 

III. MEASUREMENT OF SUPPLY, COST, AND PRODUCTION FUNCTIONS (3 weeks)

Robert M. Solow, “Technical Change and the Aggregate Production Function”, The Review of Economics and Statistics, August 1957.

Luigi Pasinetti, “On Concepts and Measures of Changes in Productivit” and Comment by R. Solow, Review of Economics and Statistics, August 1959, pp. 270-86.

Jack Johnston, “Statistical Cost Functions: Reappraisal”, Review of Economics and Statistics, 1958.

Zvi Griliches, “Hybrid Corn: And Exploration in the Economics of Technical Change,” Econometrica, October 1957, pp. 501-22.

Paul H. Douglas, “Are There Laws of Production?”, American Economic Review, March 1948, pp. 1-41.

Irving Hoch, “Simultaneous Equation Bias in the Context of the Cobb-Douglas Production Function”, Econometrica, October 1958, pp. 566-78.

John R. Meyer, M. J. Peck and others, The Economics of Competition in the Transportation Industries, Harvard University Press: Cambridge, 1959.

Lawrence R. Klien, Econometrics, “A Cross-Section Model of Production of Railway Services”, Chapter 5, Section 4, pp. 226-41.

Hollis Chenery, “Engineering Production Functions”, Quarterly Journal of Economics, November 1949.

Kenneth J. Arrow, Marvin Hoffenberg, A Time Series Analysis of Inter-industry Demands, The RAND Corporation, North-Holland Publishing Co.: Amsterdam, 1959.

Hollis Chenery and Paul G. Clark, Interindustry Economics, 1959.

 

IV. MACRO MODELS AND DECISION THEORY (5 weeks)

Hans Theil, Chapter 3, “Postwar Macro Economic Forecasts in the Netherlands and Scandinavia,” Chapter 5, “Underestimation of Changes,” pp. 154-183, Chapter 7, “Forecasts and Policy: Problems and Tools,” pp. 379-410, Chapter 8, “Underestimation of Changes: Analysis and Implications,” pp. 411-529.

James Duesenberry, Quarterly Model of U.S. Economy.

New Klein Model, Suits-Klein-Goldberger Model.

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Source: Robert Solow papers. Box 68, Folder “Reading lists”, David M. Rubenstein Rare Book & Manuscript Library, Duke University.

Image Source: MIT Museum.

Categories
Columbia Economists Funny Business M.I.T.

Columbia. Kindleberger remembers Simkhovitch, mid-1930s

Charles Kindleberger, ca 1950

Welcome to my blog, Economics in the Rear-View Mirror. If you find this posting interesting, here is the complete list of “artifacts” from the history of economics I have assembled for you to sample or click on the search icon in the upper right to explore by name, university, or category. You can subscribe to my blog below.  There is also an opportunity to comment following each posting….

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We met the curious Columbia University Professor Vladimir Gregorievitch Simkhovitch in an earlier posting. To recall briefly, Simkhovitch was a Russian born, German-trained economic historian who taught economic history and the course on socialist economics (more like anti-Marxian socialist economics) that he took over from John Bates Clark at Columbia. Milton Friedman took Simkhovitch’s economic history course.

Simkhovitch, Vladimir G. Marxism vs. Socialism. New York: Henry Holt and Company, 1913. Book first published in installments 1908-12 in Political Science Quarterly.

Charles Kindleberger was both a gentleman and a scholar who was respected and loved by his colleagues and former students. Upon the occasion of his eightieth birthday (he went on to live to the age of 92), he was presented a bound volume of brief reminiscences from everybodys who are (famous) anybodys to somebodys who are (relative) nobodys but who were all touched in some way by Kindleberger.

Today’s posting provides an assist to Professor Frank Fisher, the volunteer “custodian of [part of the Kindlberger] oral tradition”. One detail gets incorrectly transmitted in the Fisher rendition—Kindleberger was never a colleague of Simkhovitch, the two of them overlapped when Kindleberger was a Columbia graduate student in the mid 1930s.  In his reminiscence for the birthday volume, Fisher wrote:

“When Charlie Kindleberger retired from M.I.T., he asked at his party, “Who will tell my Simkhovitch stories?” I don’t know whether Charlie heard me, but I said I would.

Simkhovitch, who was Charlie’s colleague at Columbia, is the principal character in two stories (so far as I know). I have given both of them a good home and it seems appropriate that I should use them today.

In story number one, the young Kindleberger, having carefully planned out his lectures for the term, finds that with some time left to spare in his first lecture he has used up all the material for the course. After vamping for the rest of the lecture period, he seeks Simkhovitch’s advice and is told: “Recipe for education: take teaspoon full of ideas and five gallons water. Stir. Dispense with eye dropper.”…

…In story number two, a student is on the verge of failing his Ph.D. exams and the department is debating what to do. Simkhovitch says: “This man want degree. We got plenty degrees. Give him degree.”

 

 

Source: Excerpt from Frank Fisher’s contribution to the collection: Reminiscences of Charles P. Kindleberger on his Eightieth Birthday, October 12, 1990 in the Charles P. Kindleberger Papers, Box 24, MIT Libraries, Institute Archives and Special Collections.

Image Source: Charles Kindleberger in MIT Technique, 1950.