Frank Taussig resumed teaching at Harvard in the fall semester of 1903 following his leave of absence for health reasons. Economic theory was his most important course and it was split between him (first semester) and Thomas Nixon Carver (second term) during 1903-04. It is striking to see how different their examination styles were. Carver appears to have taught a catechism of doctrine in contrast to Taussig’s attempt to teach some economic reasoning. Thereafter Taussig taught his course right up to his retirement. Joseph Schumpeter then picked up the economic theory mantle in the spring semester of 1935.
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Course Enrollment
Economics 2, 1903-04
Economics 2. Professors Taussig and Carver. — Economic Theory.
Total 23: 9 Graduates, 4 Seniors, 7 Juniors, 1 Sophomore, 2 Others.
Source: Harvard University. Report of the President of Harvard College, 1903-1904, p. 66.
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ECONOMICS 2
Mid-Year Examination. 1903-04
Arrange your answers strictly in the order of the questions.
One question may be omitted.
- Do you conceive wages to be determined in amount by capital, or to be paid from capital, in these cases:—
-
- a railway which collects its receipts before pay-day comes around;
- a farmer who pays his laborers after the crop has been harvested and sold;
- a workingmen’s society for coöperative production which makes advances to members from week to week, and adds a final payment when the season’s or year’s operations have been concluded?
- State carefully how you conceive Walker to define the “no-profits” line; how he distinguishes between business profits and wages; and whether there is a vicious circle in his reasoning as to the residual element in distribution.
- Suppose a tax to be levied on a commodity subject to the law of diminishing returns, and the proceeds to be used for a bounty on a commodity produced under conditions of increasing return, — how would the welfare of the community presumably be affected?
Assume now that the first commodity is an article of comfort, the second an article of luxury, — would your conclusion be different?
Reverse the assumption, and suppose the first commodity to be one of luxury, the second one of comfort, — would your conclusion be still different? - “We might as reasonably dispute whether it is the upper blade of a pair of scissors or the lower that cuts a piece of paper, as whether value is governed by utility or cost of production. It is true that when one blade is held still, and the cutting is effected by moving the other, we may say with careless brevity that the cutting is done by the second; but the statement is not strictly accurate, and is to be excused only so long as it claims to be merely a popular and not a strictly scientific account of what actually happens.”
Explain, with reference to commodities produced under the conditions of
monopoly;
constant returns;
increasing returns.
- Explain prime cost, total cost, supplementary cost; and consider their relation to quasi-rent.
- Would Marshall say that there was true rent in the case of, —
a very profitable silver mine;
a valuable site in a town like Pullman;
a successful business man.
Why or why not in each case?
- Suppose it were provided by law that the rent of premises used for wholesale or retail trading should not exceed interest on the cost of the buildings (with due allowance for depreciation and the like), what would be the effects on landlords and tenants, and on the prices of the articles sold?
- “A rich man abstains from the consumption of his superfluous wealth, and is scarcely conscious, perhaps quite unconscious, of having suffered any deprivation whatever. On the other hand, the same or a much smaller amount of wealth reserved from personal consumption by an artisan or a small tradesman will frequently demand the most rigorous self-denial….And it is similar with labor. The laborious effort fitted to produce a given result does not represent the same sacrifice for different people: it is one thing for the strong, another for the weak; one for the trained workman, another for the raw beginner. This being so, the questions arises — How are such differences to be dealt with in computing cost of production? The answer must be that the sacrifices to be taken account of, and which govern exchange value, are not those undergone by A, B, or C, but the average sacrifices undergone by the class of laborers or capitalists to which the producers of the commodity belong.”— Cairnes. Would you accede to this conclusion as to capitalists? as to laborers?
Source: Harvard University Archives. Harvard University, Mid-year examinations 1852-1943. Box 7, Bound volume: Examination Papers, Mid-Years, 1903-04.
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ECONOMICS 2
Year-End Examination. 1903-04
- Compare Clark’s theory of business profits with Walker’s.
- Compare Clark’s concept of the static state with Marshall’s concept of the equilibrium of demand and supply.
- Compare Clark’s theory of the rent of land with the classical theory.
- Compare Clark’s definition of capital with Taussig’s.
- Compare the doctrine of the wage fund, as stated by J. S. Mill. with Marshall’s theory of “joint demand.”
- What are the chief factors which give elasticity to the wage fund?
- How does Böhm-Bawerk connect the discounting of the future with the interest of capital?
- How does Clark make out that rent and interest are only different aspects of the same income?
Source: Harvard University Archives. Harvard University, Examination Papers 1873-1915. Box 7, Bound volume: Examination Papers, 1904-05; Papers Set for Final Examinations in History, Government, Economics, … in Harvard College, June 1904, p. 27.
Image Source: Frank W. Taussig (left) and Thomas Nixon Carver (right) from Harvard Class Album 1906. Images colorized by Economics in the Rear-view Mirror.