Tag: Knight

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Chicago Economists Exam Questions

Chicago. Preliminary Examinations in Economic Theory. Friedman, chair. 1952

 

Today’s post includes not only the questions for the economic theory preliminary examinations (Part I and Part II) from the summer quarter of 1952 at the University of Chicago, but also some interesting background material. From Milton Friedman’s papers at the Hoover Institution archives I have transcribed copies of the entire schedule of preliminary examinations for summer 1952 along with the correspondence between Friedman, Frank Knight and the departmental secretary. We can compare Friedman’s suggested questions with the questions that were actually used for the exam along with Friedman’s rankings of the anonymous examinations. Two sentences in Frank Knight’s letter to Friedman (after the grades had been compared among the graders and the veil of ignorance regarding the identities of the examinees was lifted) is definitely worth considering in light of current discussions about systemic elements of racism in the discipline of economics.

“I feel that these Negroes are in the same position as the Chinese students only more so in that they compete in a completely different market, and they are never really compared with our “full fledged” Ph.D. graduates. (Besides, between you and me, I have attended 4 or 5 Ph.D. exams this summer and thought very few of them ought to pass but they all did).”

I have gone on to track down the top eight examinees as ranked by Milton Friedman. Fun facts: Gary Becker won the bronze medal and Abba Lerner’s son, Lionel Lerner, placed fourth.

The summer 1951 theory preliminary exams were posted earlier.

_________________________

Schedule for the Preliminary Examinations
Summer 1952

July 15, 1952

To: Committee members of Preliminary examinations
From: J. Barker, Departmental Secretary
Re: Schedule and committees for Preliminary Examinations, Summer Quarter, 1952.

Date Examination Committee Registration
Tues., July 29 Economic Theory I M. Friedman, Chr.,
F. H. Knight
G. Tolley		 26
Thurs., July 31 Economic Theory II (as above) 4
Tues., July 29 Government Finance P. Thomson, Chr.
H. Lewis		 1
Thurs., July 31 Industrial Relations F. Harbison, Chr.
A. Rees
M. Reid		 1
Tues., Aug. 5 Money, Banking & Monetary Policy L. Mints, Chr.
E. Hamilton
J. Marschak		 21
Tues., Aug. 5 Statistics T. Koopmans, Chr.
W. Wallis		 4
Thurs., Aug. 7 Agricultural Economics D. Johnson, Chr.
T. Schultz
P. Thomson		 8
Thurs., Aug. 7 International Econoics L. Metzler, Chr.
C. Hildreth
H. Lewis		 9

_________________________

Friedman to Knight and Tolley
Carbon copy

Orford, N.H.
July [19 or 20], 1952

F. H. Knight
G. Tolley

Dear Knight and Tolley:

I have just received word from Miss Barker that I am chairman of the Theory prelim committee for this summer, that you are the other members, and that the exams are to be in her hands by July 22.

I wish you could join me here for a session to get out the exams—and I am sure you do too if what we have been hearing about the weather in Chicago bears any resemblance to the truth.

Since you cannot, I enclose some suggested questions for both Part I and Part II. I wonder if the two of you could get together and combine these or such of them as you think worthy of retention with your own questions. Time does not permit of rechecking with me and I assure you I shall be more than satisfied with whatever decisions the two of you make.

As to the papers, have them sent to me at any stage that suits your own plans best, since mine are very flexible. I shall try to read them promptly and return them promptly. If I send you in my grades, perhaps the two of you can combine them with your own. I realize this puts more of the work on you, but I know not what else to do. I do hope we can get the grades in reasonably promptly, and certainly before the end of the quarter, which also means before I return.

Many thanks, and apologies. Best regards too.

Yours,

_________________________

Friedman’s proposed theory exam questions
Summer 1952

M. Friedman

Suggested Questions for Theory Prelim, Summer, 1952

Part I

  1. Define the following terms precisely and indicate briefly the use made of each in economics:
    1. Demand
    2. Supply
    3. Equilibrium
    4. Indifference Curve
    5. Marginal
    6. Rate of Substitution
    7. Marginal value product
    8. Marginal efficiency of capital
    9. Production function
    10. Time preference
    11. Profit
    12. Rent
    13. Run
    14. Net advantages
    15. Variable Costs
  2. (a) “I wouldn’t take it if you paid me”. Draw the consumption indifference curves implied by this statement. (You may find it helpful to suppose first that there is some finite minimum price per unit at which the speaker would take “it”; then approach the limit implied by the quotation.)
    (b) “I’ve reached the point of diminishing returns, so I better quit”. Analyze, indicating under what conditions and for what definition of diminishing returns this is a valid inference from the conditions for a maximum.
  3. (a) Complaints are often heard about the “high” incomes of bootleggers in dry states, or gamblers where gambling is illegal, or smugglers, etc. Are high incomes in such cases evidence of the success or the failure of the laws? Explain your answer.
    (b) A man buys a ticket in a lottery and wins. View this as a business transaction. How much, if any, of his prize is properly regarded as “profit”? Does your answer use the concept of “profit” implicit in the common statement “entrepreneurs seek to maximize profit”? Justify your answer and indicate the difference, if any, between the two concepts.
  4. (a) Outline the theory of joint supply
    (b) What factors determine the elasticity of the derived supply curve of one of a pair of jointly supplied items? Show the direction of influences and prove your statements graphically or otherwise.

*  *  *  *  *  *  *  *  *  *  *  *  *

M. Friedman

Suggested questions for theory prelim, Summer, 1952

Part II

  1. During every hyper-inflation there are always recurrent complaints of a “shortage of money.” How do you explain this phenomenon?
  2. The following quotation is from an article on the illicit gold traffic:
    “Traffic on the Asian gold-smuggling trails has doubled since Korea…Meanwhile savings which could be productively invested by banks lie idle; paper money is snubbed for gold, depreciates with every rise in the gold price, and becomes a weaker and weaker factor in national economies.” (H.R. Reinhardt, The Reporter, July 22, 1952, p.21).
    Analyze this quotation. Precisely what effect would the willingness of people to hold bank deposits instead of gold have on productivity or productive investment, and through what channels? What of sense and what of nonsense is there in the statements after the semi-colon?
  3. There has been much talk of the so-called “wage-price spiral.” What is generally meant by this term? Give a theoretical analysis of the so-called spiral, indicating under what circumstances you think it could or could not arise.

_________________________

Actual Economic Theory Preliminary Examination Questions
Summer, 1952

Summer, 1952

ECONOMIC THEORY I

Time: 4 hours

Answer all questions.

  1. Define the following terms precisely and indicate briefly the use made of each in economics:
    1. Demand
    2. Supply
    3. Indifference Curve
    4. Rate of Substitution
    5. Marginal value product
    6. Marginal efficiency of capital
    7. Production function
    8. Time preference
  2. (a) Outline the theory of joint supply
    (b) What factors determine the elasticity of the derived supply curve of one of a pair of jointly supplied items? Show the direction of influences and prove your statements graphically or otherwise.
  3. Assume that Crusoe is interested in economizing the use of his resources and that during the period in question there is no change in his knowledge of production techniques. How does capital and interest theory aid in explaining the following observations?

(a) After several years, Crusoe begins to obtain berries by planting and cultivation rather than simply by picking them as he had done previously.
(b) After an additional number of years, he reverts to picking wild berries.

  1. What theories do you offer to explain the following phenomena?

(a) During a prolonged rise in the general level of prices, the price of soft drinks remained at five cents with no change whatsoever in the physical characteristics of the product.
(b) During a prolonged rise in the general level of prices the price of candy bars remained at five cents, at the same time, however, as the size of the bars decreased.

  1. Using diagrams, briefly discuss the long-run cost curve for a competitive industry. Indicate, with diagrams, the response to be expected from (a) an expansion of demand, (b) a decrease of demand, within periods too short for a significant change in the fixed investment.
  2. Briefly state the main changes in the body of accepted price theory at the turn from “classical” to “Austrian” (the subjective-value school), i.e., at the “revolution” of the 1870’s. Similarly describe the transition from Austrian to “New-classical” (Marshallian) doctrine.

*  *  *  *  *  *  *  *  *  *  *  *  *

Summer, 1952

ECONOMIC THEORY II

Time: 2 ½ hours

Answer all questions.

  1. During every hyper-inflation there are recurrent complaints of a “shortage of money.” How do you explain this phenomenon? Compare the situation during acute depression.
  2. A part of the nation’s productive capacity is destroyed, say by a war. Ignoring any possible expectational and distributive effects, how will this affect: (a) the division of the national income between consumption and investment? and (b) the income-velocity of money. How, if at all, does your answer depend on whether wealth is a variable which influences behavior?
  3. There has been much talk of the so-called “wage-price spiral.” What is generally meant by this term? Give a theoretical analysis of the so-called spiral, indicating under what circumstances you think it would or would not arise.

_________________________

Theory Prelim, Summer, 1952, Part I. Grades by M. Friedman

General notes:

  1. I have classified the papers into five groups.

P—clear pass for the Ph.D. (7 papers)
P(?) Questionable pass for Ph.D. (5 papers)
A.M. Pass for a.M./questionable fail for Ph.D. (5 papers)
F(?) Questionable fail for A.M., clear fail for Ph.D. (4 papers)
F Clear fail for both (4 papers)

Should emphasize that as always this is somewhat arbitrary. In particular, difference between two fail classes is particularly small in this batch.

  1. In addition to the above class mark, Igive the ranking by my numerical grades. 1 is the best paper, 2, the next best, etc., to aid in seeing whether any differences among members of the committee reflect differences in absolute or relative grading.
# of candidate. Class grade Rank Remarks
1 AM 16
2 F 24
3 P 6
4 P(?) 8
5 P 5
6 F(?) 21
7 AM 14
8 P(?) 11
9 AM 15
10 P 4
11 P(?) 12
12 F 25
13 P 2 This and 15 distinctly the two best papers
14 F(?) 18
15 P 1 See under 13
16 AM 13
17 AM 17
18 F 23
19 F 22
20 P 7
21 P 3
23 F(?) 19
25 P(?) 10
26 F(?) 20
27 P(?) 9

 

PART II OF THEORY PRELIM

Not one of the three papers submitted on this part seems to me satisfactory. #1 is the best of the three, though not by much, and might deserve a questionable pass. Both of the others seem to me clear failures.

_________________________

 

THE UNIVERSITY OF CHICAGO
Chicago 37, Illinois
Department of Economics

September 8, 1952

Mr. Milton Friedman
Orford
New Hampshire

Dear Milton:

Tolley and I have just gone over our three reports and find them fairly well in agreement. The most serious exception is #7—John J. Klein, whose paper you marked passable for the A.M. only, while both Tolley and I gave him a clear pass. Your rank was 14, as you probably have the record to show. What do you suggest? It will be no great hardship to us to re-read the paper, and we shall do so with the next day or so. Do you want to see it again? Or what can we report?

Another questionable case is Adolph Scott (Colored). Here I am the odd man, as I marked him passable, while you ranked him 23 out of 25, and Tolley ranked him 24. I yield as far as passing him for the Ph.D. is concerned but wondered what you would think about passing him for the A.M. He seems to have squeezed through in International Trade at the A.M. level. This would allow him to get the Master’s degree. I feel that these Negroes are in the same position as the Chinese students only more so in that they compete in a completely different market, and they are never really compared with our “full fledged” Ph.D. graduates. (Besides, between you and me, I have attended 4 or 5 Ph.D. exams this summer and thought very few of them ought to pass but they all did).

On Part II there is also some discrepancy. I had Mints read these papers, and he and I agree that #2, Mrs. Mullady, was passable. But you and Tolley both wrote failure and as she failed “flat” on Part I and has also failed a second time in another field, it looks as though that disposes of her case. This leaves S. Smidt who has your vote, a questionable pass, Tolley’s a clear pass, and Mints and I though a very very [sic] dubious pass. But Smidt passes Part I with colors flying. I am perfectly willing and in fact disposed to yield on him and pass him as I don’t feel competent to grade these Part II papers anyway.

Cordially,

(Dictated but not read)
Frank H. Knight

Source: Hoover Institution Archives. Milton Friedman Papers. Box 76. Folder 2 “University of Chicago ‘Economic Theory’”.

_________________________

Identities of eight examinees given passing grades
by Milton Friedman by rank

First place

Seymour Smidt. University of Chicago Ph.D. (1954). Dissertation: “Efficient Management for Government Wheat Stocks”.

Second place

Conrad Jan (Coen) Oort. University of Chicago A.M. (1954). Doctor of Economics, University of Leiden (1958).

Professor economics, U. Utrecht, The Netherlands, 1960-1971; professor economics, University of Michigan, Ann Arbor, 1956-1957; treasurer-general, Treasury, The Hague, The Netherlands, 1971-1977; managing director, Algemene Bank Nederland Bank (now Algemene Bank Nederland-AMRO), Amsterdam, The Netherlands, 1977-1989; non-executive director various companies, The Netherlands, since 1989; professor economics, Maastricht, The Netherlands, since 1986. Chairman KLM, Amstelveen, Netherlands, 1992, Robeco Group, Rotterdam, Netherlands, 1989. Vice chairman Aegon Insurance, The Hague, 1990.
Source: Prabook webpage for Conrad Jan Oort.

Third place

Gary S. Becker. University of Chicago Ph.D. (1953). Dissertation: “The Economics of Racial Discrimination”.
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1992.

Fourth place

Lionel John Lerner. [son of Abba P. Lerner and Alice Sendak]. University of Chicago A.B. (1950) and A.M. (1952). Johns Hopkins University Ph.D. (1955). Dissertation: “Theories of Imperialist Exploitation.”
Source: Johns Hopkins University, Sheridan Libraries, Special Collections. Commencement Program 1955, p. 19.

Fifth place

Edward J. Kilberg. Hofstra University B.A. (1949). Duke University A.M. (1952). University of Chicago A.M. (1957).
Apparently Kilberg was never awarded a Ph.D. in economics by the University of Chicago for his dissertation “Commercial bank holdings of cash and liquid items”. Most likely reason is that he died in the crash of a Northeast airliner at Nantucket Airport on August 15, 1958. Kilberg left a research job at the Mutual Life Insurance Company in 1957 to go to the NBER where he worked as assistant to Arthur F. Burns for the book Prosperity Without Inflation (1958).

Sixth place

Hugh Roy Elliott. In the list of economics Ph.D. dissertations kept by the department of economics at the University of Chicago we find “Hugh R. Elliott. Dissertation: Savings Deposits as Money (Summer 1964)” which seems rather late in the game. But then we see: AER Sept. 1957, p. 838 “Hugy [sic] R. Elliott, B.A. Harvard 1950; M.A. Chicago 1952.” Thesis in preparation at Chicago “Savings deposits as money”.

Seventh place

Irwin Ira Baskind. I have found the following item “Baskind, Irwin. Postwar Monetary Policy in Belgium (Ph.D., Chicago)” from U.S. State Department, Bureau of Intelligence and Research. External Research. A List of Studies Currently in Progress, Western Europe, ER list no. 5.14 (April 1960), p. 9. Note: Baskind’s name does not appear in the list of economics Ph.D.’s kept by the Chicago department of economics.

Eighth Place

Paul Gabriel Keat. Baruch School of the City University of New York B.B.A. (1949). Washington University A.M. (1950). University of Chicago A.M. (1952, 1956). University of Chicago Ph.D. (1959). Dissertation: “Changes in Occupational Wage Structure 1900-1956”.

Keat, Paul G. PhD 88, passed away on April 2, 2014.Born in Prague, Czechoslovakia May 2, 1925. A WWII vet who served in Ardennes, Normandy and Rhineland. Decorated with the European African Middle Eastern Services Medal, Good Conduct Medal and WWII Victory Medal. Discharged 1946. Graduated 1959 from the University of Chicago with an M.A. and PhD in economics. Student of his cherished professor, Dr. Milton Friedman. Earned B.B.A. in accounting from Baruch School of the City University of New York and M.A. from Washington University. Paul’s work with IBM was extensive in both the United States and in the European headquarters based in Paris. He taught both finance and economics at the graduate level in numerous universities including Syracuse University, Washington University, the City University of New York, Iona College and the Lubin Graduate School of Business at Pace University. In 2013 he co-authored and published the seventh edition of his textbook “Managerial Economics”.
Source: Arizona Republic, Phoenix. April 13, p. F9.

Images: The economic theory prelim examiners, Friedman, Knight, and Tolley. From the University of Chicago Photographic Archive.

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Chicago Exam Questions

Chicago. Graduate prelim exams in economic theory. Metzler, Friedman and Knight, 1951

 

The previous post provided the names of the examination committee members for the economics preliminary exams for the Ph.D./A.M. by field at the University of Chicago for the summer quarter of 1951. The names of the students registered for the respective examinations were transcribed as well. The economic theory examining committee for that round consisted of Lloyd Metzler (chair), Milton Friedman, and Frank Knight. This post provides a transcription of both economic theory exams along with Friedman’s hand-written answer to Question 5 of Part I.

_____________________

ECONOMIC THEORY
Part I
Summer Quarter, 1951

(Do not write your name on your paper. Use only the number in the top right-hand corner of this examination.)

Ph.D. candidates. Write 3½ hours. Answer all questions.

A.M. candidates. Write 2½ hours on questions #1 and #2 and one other.

  1. Discuss the probable shape of the long-run cost curve for an industry operating under approximately perfect competition. How would it differ in the short run, i.e., in response to an unanticipated shift in the demand-curve for the product, assumed not to be permanent?
  2. Briefly discuss the Ricardian conception of capital, specifically in relation to his theory of wages. Argue the question whether wages are paid out of (pre-existing) capital or out of (current) product.
    Can you find any relation between the Böhm-Bawerk production-period theory of interest and the Ricardian theory of capital and profit? What is the crucial assumption about the nature and source of capital which underlies the production-period theory, and is it sound? How does diminishing returns to investment enter into Ricardo’s and Böhm-Bawerk’s theories?
  3. Consider a trade union that is strong enough to prevent nonmembers from working at the trade in question and whose membership, for simplicity, will be supposed unaffected by the level of returns to members within broad limits (e.g., future membership consists of present membership minus members who die plus male children of present members). Analyze what its position would be toward the immigration of unskilled labor if it took account solely of the effect of such immigration on the incomes of its members. What considerations, if any, should lead it to favor more extensive immigration? What considerations, if any, to favor restriction on immigration? Is there a clear balance in favor of the one position or the other?
  4. “The orthodox tools of supply and demand assume that sellers and buyers are free to buy or sell any quantities they wish at the price determined by the market. This assumption cannot validly be made when price controls or rations are imposed by government. It follows that these tools are useless in analyzing the effects of such governmental actions. Economists should free themselves from slavish adherence to outmoded concepts and fashion new tools for the new problems raised by the modern Leviathan.” Discuss.
  5. The following figures represent the prices and quantities of two commodities, A and B, consumed by three individuals having the incomes stated in two different periods of time.

First Period

 Second Period
Pa Qa Pb Qb Income Pa Qa Pb Qb

Income
Arthur

$1

 20 $2 10 $40 $2 10 $1 20

$40
John

$2

 20 $1 10 $50 $1 10 $2 20

$50
Paul

$2

 20 $1 10 $50 $2.50 10 $1.25 20

$50

Assuming that each individual spends his whole income on the two commodities, and assuming also that there is no change in tastes between the two periods, indicate for each individual what the above information reveals as to whether the bundle of goods consumed in Period I represents a lower or a higher level of satisfaction that the bundle consumed in Period II. Explain your conclusions fully. (It is recommended that a diagram be used in answering this question.)

 

[Answers to Question 5 in pencil: Arthur “Can’t tell”; John “Inconsistent”; Paul: “First period better”]

From sketch in Milton Friedman’s copy of the exam.

 

 

ECONOMIC THEORY II
Summer Quarter, 1951

Time: 2½ hours.

  1. (a) Describe and discuss briefly the circumstances that gave rise to the establishment of the Federal Reserve System and the major events (including its actions) in its history.
    (b) In light of this survey of the record, comment on the following conclusion of one student: “The Federal Reserve System should be abolished. It served as an engine of inflation in two World Wars and post-war periods, hindered the re-establishment of satisfactory monetary standards throughout the world in the 1920’s, and failed to prevent the Great Depression, if indeed it was not itself largely responsible for the severity of that depression. The United States would have had a happier history if the pre-1913 monetary arrangements had been continued thereafter.”
  2. “From the preceding considerations it would be seen, even if it were not otherwise evident, how great an error it is to imagine that the rate of interest bears any necessary relation to the quantity or value of the money in circulation. An increase in the currency has in itself no effect, and is incapable of having any effect, on the rate of interest.” (J.S. Mill)
    “We can sum up the above in the proposition that in any given state of expectation there is in the minds of the public a certain potentiality towards holding cash beyond what is required by the transactions-motive or the precautionary-motive, which will realize itself in actual cash holding in a degree which depends on the terms on which the monetary authority is willing to create cash…Corresponding to the quantity of money created by the monetary authority, there will, therefore be set.  par. a determinate rate of interest.” (J. M. Keynes)
    “The saving schedule tells us what part of income the community desires to save. The technical conditions…expressed by the marginal-efficiency-of-investment function, determine the marginal efficiency of the amount of investment that the giving up of consumption permits undertaking. (The intersection of the two schedules determines) the equilibrium rate of interest.” (F. Modigliani).
    Can you reconcile these opinions concerning the determinants of the interest rate? Explain fully, making and stating any assumption you like as to the conditions of production, the time period under consideration, and the flexibility of prices and costs.
  3. What measures would you advocate—and give your reasons for inclusion and omission—for controlling the inflationary tendency in the U.S. under present conditions?

 

Source: Hoover Institution Archives. Papers of Milton Friedman, Box 76, Folder “76.2 University of Chicago, ‘Economic Theory’”.

Image Source: Social Science Research Building. University of Chicago Photographic Archive, apf2-07490, Special Collections Research Center, University of Chicago Library.

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Chicago Economics Programs Economists Fields

Chicago. Schedule of the preliminary economics exams for the Ph.D. and A.M., Summer 1951

 

The following schedule for preliminary examinations in economics at the University of Chicago from the summer quarter of 1951 comes from Milton Friedman’s papers at the Hoover Institution Archives. We see that he was on the two economic theory examination committees along with Lloyd Metzler and Frank Knight. Besides providing the names of the faculty members serving on the nine committees, the schedule also provides the names of the sixty students registered for the examinations during that quarter.

____________________

DEPARTMENT OF ECONOMICS

SCHEDULE FOR PRELIMINARY EXAMINATIONS
FOR THE PH.D. AND FOR THE A.M.

Summer Quarter, 1951

The schedule below shows the examinations requested for the current quarter. Will the chairman of each committee please be responsible for turning in the complete examination at least one week before the date on which it is to be given?

 

Date

 Examination Committee

Students Registered

Thurs., Aug. 2
8:30
Law Court

Agricultural Economics

 D.G. Johnson, chr.
C. Hildreth
T.W. Schultz		 Dunsing, Marilyn (A.M.)
Fox, Kirk (Ph.D)
Hughes, Rufus (Ph.D.)
Taylor, Maurice (Ph.D.)

Tues., July 31
8:30
Law Court

Economic Theory I

 L. Metzler, chr.
M. Friedman
F. Knight		 Baskind, Irwin (Ph.D.) in abs.
Bassett, Marjorie (Ph.D.-A.M.)
Blumberg, Lionel (Ph.D.-A.M.)
Chen, Ho-Mei (Ph.D.)
Chen, Sze-te (Ph.D.-A.M.)
Chien, Chih Chien (Ph.D.)
Cleaver, George (Ph.D.)
Dunsing, Marilyn (A.M.)
Emmer, Robert (Ph.D.)
Fox, Kirk (Ph.D.)
Frank, Andrew (Ph.D.-A.M.) in abs
Gustus, Warren (Ph.D.)
Heizer, Raymond (Ph.D.)
Herlihy, Murray (Ph.D.)
Hoch, Irving (Ph.D.)
Hughes, Rufus (Ph.D.)
Krawczyk, Richard (Ph.D.-A.M.) in abs
Lerner, Eugene (Ph.D.)
Liang, Wei K. Liang (Ph.D.)
Lininger, Charles (Ph.D.)
Lurie, Melvin (Ph.D.)
McGuire, Charles (Ph.D.)
Malhotra, Man Mohan (Ph.D.)
Malone, John (Ph.D.)
Mitcham, Clinton (Ph.D.-A.M.)
Morrison, George (Ph.D.-A.M.)
Sonley, Lorne (Ph.D.)
Taylor, Maurice (Ph.D.)
Terrell, James (Ph.D.-A.M.)
Toscano, Peter (Ph.D.)
Traeger, Gordon (Ph.D.-A.M.)
Viscasillas, Felipe (Ph.D.)
Waldorf, William (Ph.D.)
Weir, Thomas (Ph.D.)
Weiss, Roger (Ph.D.-A.M.)
Zelder, Raymond (Ph.D.)

Tues., Aug. 7
8:30
Law Court

Economic Theory II

 L. Metzler, chr.
M. Friedman
F. Knight		 Chen, Ho-Mei (Ph.D.)
Herlihy, Murray (Ph.D.)
Hoch, Irving (Ph.D.)
Toscano, Peter (Ph.D.)
Weir, Thomas (Ph.D.)

Thurs., Aug. 9
8:30
Law Court

Government Finance

 P. Thomson, chr.
J. Marschak
D.G. Johnson		 Frank, Andrew (Ph.D.-A.M.) in abs
Haskell, Max (Ph.D.) in abs
Henry, Edward L. (Ph.D.)
Horwitz, Bertrand (Ph.D.-A.M.)
Lininger, Charles (Ph.D.)
Selden, Richard (Ph.D.)

Thurs., Aug. 9
8:30
Law Court

Industrial Relations

 F. Harbison, chr.
E. Hamilton
H.G. Lewis		 Barghout, Saad (Ph.D.)
Bechtolt, Richard (Ph.D.)
Hoch, Irving (Ph.D.)
Liang, Wei K. (Ph.D.)
Mullady, Philomena (Ph.D.)
Ness, David (Ph.D.)

Thurs., Aug. 2
8:30
Law Court

International Economics

 L. Metzler, chr.
B. Hoselitz
A. Rees		 Alberts, William (Ph.D.)
Anderson, Edwin (Ph.D.) in abs
Chen, Sze-te (Ph.D.-A.M.)
Chien, Chih Chien (Ph.D.)
Cleaver, George (Ph.D.)
Frank, Andrew (Ph.D.-A.M.)
Glick, Milton (Ph.D.-A.M.)
Gustus, Warren (Ph.D.)
Lukomski, Jesse (Ph.D.-A.M.)
Mitcham, Clinton (Ph.D.-A.M.)
Morey, Donald J. (Ph.D.-A.M.)

Tues., Aug. 7
8:30
Law Court

Money, Banking, and Monetary Policy

 L. Mints, chr.
E. Hamilton
J. Marschak		 Alberts, William (Ph.D.)
Bauer, Milton (Ph.D.)
Blumberg, Lionel (Ph.D.-A.M.)
Chen, Sze-te (Ph.D.-A.M.)
Chien, Chih Chien (Ph.D.)
Cleaver, George (Ph.D.)
Conomikes, George (Ph.D.-A.M.)
Davis, George (Ph.D.) in abs
Emmer, Robert (Ph.D.)
Heizer, Raymond (Ph.D.)
Horwitz, Bertrand (Ph.D.-A.M.)
Hughes, Rufus (Ph.D.)
Krawczyk, Richard (Ph.D.-A.M.) in abs
Lerner, Eugene (Ph.D.)
Liang, Wei K. (Ph.D.)
Lukomski, Jesse (Ph.D.-A.M.)
Meckling, William (Ph.D.)
Mitcham, Clinton (Ph.D.-A.M.)
Morey, Donald (Ph.D.-A.M.)
Ogawa, George (Ph.D.)
Smulekoff, Suzanne (Ph.D.-A.M.)
Sonley, Lorne (Ph.D.)
Taylor, Maurice (Ph.D.)
Terrell, James (Ph.D.-A.M.)
Traeger, Gordon (Ph.D.-A.M.)
Zelder, Raymond (Ph.D.)
Zingarelli, Carla (Ph.D.-A.M.)
Rayack, Elton  (Ph.D.) in abs

Thurs., Aug. 2
8:30
Law Court

Statistics

 T. Koopmans, chr.
C. Hildreth
H.G. Lewis		 Cagan, Phillip (Ph.D.)
Hogan, Lloyd (Ph.D.)
Katzman, Irwin (Ph.D.)
Malhotra, Man Hohan (Ph.D.)
Waldorf, William (Ph.D.)

Thurs., Aug. 2
8:30
Law Court

Economic History

 E. Hamilton Mullady, Philomena (Ph.D.)
Toscano, Peter (Ph.D.)

Source: Hoover Institution Archives. Papers of Milton Friedman. Box 76, Folder “University of Chicago ‘Economic Theory’”.

Categories
Chicago Economists Salaries

Chicago. Selected salaries. Hayek visiting, Friedman as associate professor, 1946

 

 

Since economists put much store in the notion of people putting their (own or other people’s) money where their mouths are, Economics in the Rear-view Mirror provides from time to time some historical faculty salaries to shine a little light on where those professors of economics before us stood in the willingness-to-pay of their respective departments and university administrations. In this post we see how the brief visiting professorship of Friedrich Hayek and the tenured associate professorship of Milton Friedman fit into the 1946 salary structure at the Univerity of Chicago’s department of economics.

Note: For his half-quarter service Hayek was offered $2,000 (quoted in a January 23, 1945 note  from the director of the U of Chicago Press to VP E. C. Colwell). I presume the $4,000 figure includes $2,000 compensation from (or on behalf of) Stanford University.

_______________________

Comparison: Selected 1945-46 Chicago Salaries
(and recommendations for 1946-47)

Jacob Viner. $10,000
Frank Knight. $9,000 ($10,000)
S.E. Leland. $9,000 ($9,500 Note: resigned to go to Northwestern)
T.W. Schultz. $9,000 ($9,000)
John U. Nef. $8,000 ($8,000)
Jacob Marschak. $8,000 ($8,500)
Paul H. Douglas. $7,000 ($8,000)
Oscar Lange. ($6,000) ($6,000) on leave 1 Oct 1945 to 30 June 1947
Henry Simons. $6,000 ($6,000)
L. W. Mints. $5,500 ($6,000)
Tjalling Koopmans $5250 ($6,740. Note: new salary effective 1 January 1946)

Source:  “Budget and Appointment Recommendations 1946-47 (December 7, 1945)”

_______________________

Hayek’s Half-Quarter, Spring 1946

 

May 10, 1946

Mr. Robert Redfield Social Sciences
R. G. Gustavson Central Administration

On May 9, 1946 the Board of Trustees approved the following recommendations:

It is recommended that Friedrich A. Hayek be appointed Visiting Professor of Economics in the Department of Economics for the period April 8, 1946 to May 11, 1946. For this service and a similar period of service at Stanford University it is recommended that an honorarium of $4,000 be approved.

cc:
Mr. T. W. Schultz
Mr. L. A. Kimpton)      Salary not mentioned
Mrs. K. Turabian)        Salary not mentioned

 

Board—5/9/46:

It is recommended that Friedrich a. Hayek be appointed Visiting Professor of Economics in the Department of Economics for the period April 8, 1946 to May 11, 1946. For this service and a similar period of service at Stanford University it is recommended that an honorarium of $4,000 be approved.

Form sent to Comptroller—5/13/46

*  *  *  *  *  *  *  *  *

Milton Friedman’s tenured associate professorship
Effective October, 1946

March 19, 1946

Mr. Robert Redfield Social Sciences
R. G. Gustavson Vice President

On March 28, 1946 the Committee on Instruction and Research approved the following recommendation:

It is recommended that Milton Friedman be appointed Associate Professor of Economics in the Department of Economics on indefinite tenure on a 4E Service basis at an annual salary of $6,000 effective October 1, 1946.

cc:
Mr. T. W. Schultz
Mr. L. A. Kimpton)      Salary not mentioned
Mrs. K. Turabian)        Salary not mentioned

 

I & R. 28 March 1946:

It is recommended that Milton Friedman be appointed Associate Professor in the Department of Economics on indefinite tenure on a 4E service basis at an annual salary of $6,000 effective October 1, 1946.

 

Source: University of Chicago Library. Department of Special Collections. Office of the President. Hutchins Administration Records. Box 284. Folder “Economics, 1943-1947”.

Image Source: National Portrait Gallery. Photographs Collection. NPG x187289. Friedrich August von Hayek by Walter Stoneman, half-plate glass negative, June 1945. The portrait has been cropped to fit the format of this webpage.
Creative Commons License Creative Commons license. Attribution-NonCommercial-NoDerivs 3.0 Unported (CC BY-NC-ND 3.0).

Categories
Chicago History of Economics Suggested Reading

Chicago. Bibliography for History of Economic Thought. Frank Knight, 1933

 

 

Milton Friedman’s papers at the Hoover Institution Archives include the economics course notes from his student years. In an earlier post I transcribed Friedman’s own listing of his coursework in economics, statistics and mathematics by quarter/semester and academic institution. This is how we know that it was during the 1933 Winter Quarter that Milton Friedman attended Frank Knight’s course on the history of economic thought.  Friedman’s notes begin with a four page course bibliography. An image of the first page is included below. A transcription of the complete bibliography, augmented with links to almost all items, immediately follows.  

I had earlier transcribed the mimeographed course bibliography from the 1946 Winter Quarter found in Norman Kaplan’s student notes that I found in the University of Chicago archives. The 1946 course bibliography includes about twenty additional items when compared this 1933 version.

With a clear, typed bibliography to check against Friedman’s sometimes only partially legible handwritten notes, I discovered that duplication technology must have dramatically improved between 1933 and 1946 at the University of Chicago. Friedman clearly copied from a nearly identical bibliography (including Knight annotations!) that I surmise might have been only available as a single typed list posted with reserve material at the library. 

First page of Frank Knight’s bibliography for the History of Economic Thought course in Milton Friedman’s student notes at the University of Chicago, Winter Quarter 1933.

 

___________________________

Economics 302
History of Economic Thought
Frank H. Knight

Bibliography

General Works

Gray, Alexander—Development of Economic Doctrine

Haney, L.H.—History of Economic Thought

(Read both of them on classical school with care)

Ingram, J. K.—A History of Political Economy. Briefer than Haney, and usable

Spann, O. History of Economics (English Translation [of 19th German ed., 1930]) [17th ed., German original Die Hauptheorien der Volkswirtschaftslehre (1928)]

Valuable for its intense opposition to the viewpoint of the classical school, in favor of an organismic or universalistic standpoint.

Won’t make much use of:

Oncken A.—Geschichte der National Ökonomie. Very good up to Adam Smith (Knight likes)

Gide, C. and Rist, C.—History of Economic Doctrine. (Translation from French) Competent but uninspired book. (Begins with Physiocrats) (Knight does not like.)

Schumpeter, Joseph—Epochen der Dogmen- und Methodengeschichte, contained in Grundriss der Sozialökonomik, Vol. I. [English translation]

On the whole period before the classical school

Monroe, A.E.—Early Economic Thought. Lengthy excerpts from important writers

Dunning, W.A.—History of Political Theories, Ancient and Mediaeval

Dunning, W.A.—History of Political Theories, From Luther to Montesquieu

 

Greco-Roman Economics

Miss [E.] Simey—article entitled Economic Theory among the Greeks and Romans [Economic Review vol. 10 (October 1900), pp. 462-481] (On Reserve)—Best about ancient

Laistner, M.L.W.—Greek Economics, Introduction and excerpts.

 

Medieval

Ashley, W. J.—English Economic History and Theory. Volume I, Part I, Chapter 3, and Volume I, Part II, Chapter 6. Best general account.

O’Brien, George—An Essay on Medieval Economic Theory. Highly important, especially because from a Catholic point of view.

Becker Carl, The Heavenly City of the 18th Century Philosophers. Chapter 1 on the climate of opinion.

Tawney, R.H.—Religion and the Rise of Capitalism. Chapter I on the Medieval Background.

 

Physiocrats.

(Given very little attention in this course)

Ware, Norman—article on the Physiocrats in American Economic Review, 1931

Turgot, A.R.J., Formation and Distribution of Riches (Ashley Economic Classics)

 

Mercantilism

Viner, J. English Theories of Foreign Trade before Adam Smith. In Journal of Political Economy, volume 38, numbers 3 and 4. [Reprinted in Studies in the Theory of International Trade: First Part; Second Part]

Schmoller, Gustav. The Mercantile System. Invaluable, also as a specimen of the German Historical Economics.

Ashley, W. J. The Tory Origin of Free Trade. Q. J. E. Volume 11.

 

Classical School

Whitaker A. C.—Labor Theory of Value in English Political Economy. Nearly essential.

Cannan E. –Theories of Production and Distribution. Valuable, but laborious reading.

Cannan—Review of Economic Theory. Later and more available.

 

(Ought to own)

Adam Smith—Wealth of Nations. Full text, Everyman’s Library (2 volumes) most available [Volume One; Volume Two]. Abridged edition edited by Ashley gives part covered in course conveniently in one volume. Cannan Edition (2 vols.), the definitive edition, but expensive and bulky.

Ricardo, David—Principles of Political Economy. Gonnar Edition best. Available in Everyman’s.

Mill, J. S.—Principles of Political Economy. Ashley edition

 

Subjective Value or Marginal Utility School

Smart Wm.—Introduction to the Theory of Value.

Wieser, F.—Natural Value

Smart’s prefaces to Böhm-Bawerk’s two main volumes [Böhm-Bawerk Capital and Interest and Positive Theory of Capital] and to Wieser’s Natural Value.

Weinberger, Otto—Die Grenznutzenschule

Mises, Ludwig—Bemerkungen zum Grundproblem der Subjektivistischen Wertlehre, contained in Archiv für Sozialwissenschaft und Sozialpolitik. Band 59, Heft 1.

 

Source: Hoover Institution Archives.  Milton Friedman Papers, Box 120. Notebook: “Economics

Image Source: Special Collections Research Center, University of Chicago Library. University of Chicago Photographic Archive, apf1-03516.

Categories
Berkeley Chicago Dartmouth Economists

Berkeley and Dartmouth. Frank Knight’s economist brothers Melvin M. Knight and Bruce Winton Knight

 

Pairs of siblings becoming professors of economics are infrequent but hardly rare. A trio of siblings becoming professors of economics becomes easier to imagine when one considers families with nine children as was the case for Frank H. Knight and his brothers Melvin Moses Knight and Bruce Winton Knight. This post provides images and official university obituaries  for Melvin and Bruce. 

Seeing “salty individualist” in the first line of an obituary tells us something about Melvin, perhaps that he was not an easy-going, cheery colleague?  

The previous post unearthed a ballad (The Ballad of Right Price) from the early 1920’s written by Bruce Knight who was a graduate-student quizmaster for University of Michigan professor Fred M. Taylor at the time.

The only photo I could find of the middle brother of the three, Melvin, is cropped from the image of his passport application of June 1917. At the  online archive of the Dartmouth Alumni Magazine one can find a few different pictures of the youngest, Bruce.

_________________________

 

__________________

Melvin Moses Knight, Economics: Berkeley
1887-1981
Professor Emeritus

The University of California has numbered many salty individualists among its faculty. M.M. (Melvin Moses) Knight must figure high among them. Born April 29, 1887 on a farm near Bloomington, Illinois, he was one of nine children. Three were to be distinguished economists, M.M. at Berkeley, Frank at the University of Chicago, and Bruce at Dartmouth. Life on the farm was not always easy. At age 13, M.M. found himself responsible for running the farm. A self-taught man, he never attended high school. For a time he worked as a locksmith and bicycle mechanic. He later showed skills as plumber and musician. At age 23 he managed to qualify for entrance into Milligan College, Tennessee. After two years, he transferred to the University of Tennessee, where he studied physics and economics. He took an A.B. at Texas Christian University in English in 1913, followed the next year by an M.A. in history. He studied for a while at the University of Chicago and finally earned a Ph.D. in sociology at Clark University in sociology, with a thesis, Taboo and Genetics. His studies continued at other institutions, including the New School for Social Research and the University of Paris in such fields as geology, geography, genetics, mathematics, and theology. Later his wide interdisciplinary interests showed up in his teaching and writing.

He was no stranger to war. During World War I he served as a volunteer ambulance driver with the French army and later with the intelligence section of the Air Service of the American Expeditionary Force. In 1919 he served as a volunteer with the Romanian Field Hospital, Regina Maria, in Transylvania and Hungary. He was discharged as a captain and decorated with the Romanian Cross of Merit. During World War II, by then too old for active duty, he served as Assistant Chief, Division of Economic Studies, Department of State.

M.M.’s academic career began in 1920 at Hunter College, followed by brief periods at the Universities of Utah and California. From 1923 to 1926 he was in the Department of History at Columbia University. In 1926 an Amherst Memorial Fellowship took him to Europe and North Africa to examine the French colonial system. In 1928 he joined the Department of Economics of the University of California, Berkeley, where he remained until his retirement in 1954.

In teaching, writing, and dealings with colleagues, M.M. displayed the keenly interdisciplinary character of his studies and a probing curiosity. His first publication was a Dictionnaire Pratique d’Aeronautique, prepared for the U.S. Air Service in 1918. After that came a number of articles on the contemporary economy and the political problems of eastern Europe, economic history, and colonial questions. His “Water and the Course of Empire in French North Africa” (Quarterly Journal of Economics, 1925) is a masterly exposition of the millennial relation between physical changes in man’s environment and the structure of economic organization. By the mid-1920s he entered upon a spate of publication: Economic History of Europe to the End of the Middle Ages (1926), later translated into French; co-authorship of Economic History of Europe to Modern Times(1928); The Americans in Santo Domingo(1928), a condensation of a much larger manuscript, published as well in a number of Spanish editions; an English translation of Sée’s Economic Interpretation of History (1929); Introduction to Modern Economic History (1940); and numerous articles in the Encyclopaedia of the Social Sciences.

M.M. Knight’s concerns in economics are best summarized in the tribute to him written by Giulio Pontecorvo and Charles F. Stewart in 1979 (Exploration in Economic History, 16:243-245):

The theoretical apparatus of contemporary economics is focused on general equilibrium analysis and the solution of welfare problems within that static framework. In the simplest sense, Knight departs from today’s emphasis and this line of inquiry by his deep fundamental concern with the problem of the nature of economic scarcity and society’s response to scarcity through time rather than with the determinants of real income and the social implications of alternative income distributions.

He transcends Veblen and especially Galbraith and Rostow by his concern with the evolution and the full extent of economic structures. While Veblen was concerned with the industrial economy and its linkages to other elements, e.g., finance, etc., Knight’s view is both more holistic and more focused on the evolutionary and disequilibrium properties of economic systems.

Unlike the American institutional position, as it is typically presented, Knight adds a strong sense of geography, of place, and the ecology of place. In this particular way, he reveals his links both with his rural origins and with the traditions of French economic history…

Each society is constrained by its own geographic and resource endowments. Each therefore responds to the problem of scarcity in its own way and creates its own institutions or transforms those it borrows. Regardless of the form of the response, the process of expansion works over time to use up the opportunity… Once an opportunity is used up, it requires both technological development and a reordering of social institutions to create a new set of human opportunities and this is a formidable social task of the true long run… unlike the essentially optimistic cast of Marxian inevitability, Knight has a strong sense that systems run down and because they are located in space as well as in time, systems that have exhausted themselves do not necessarily get transformed and revived but tend to be replaced, as were Egypt and Rome and North Africa.

While in Paris, Knight married Eleanor Gehmann in what proved to be a long, happy companionship in his years of active service and after his retirement in 1954. She died in February, he on June 12, 1981.

W.W. Borah M.M. Davisson C.A. Mosk

 

Source: Melvin Moses Knight, 1887-1981. Economics: Berkeley. University of California (System) Academic Senate. 1988, University of California: In Memoriam, pp. 76-78.

__________________

Obituary, Bruce Winton Knight

Bruce Winton Knight, for 36 years a member of the Dartmouth economics faculty, died on May 28 at Mary Hitchcock Memorial Hospital in Hanover after a long illness. He would have been 88 on June 27.

Knight, who retired in 1960, was a vigorous opponent of what he called “pseudo-liberalism” and “state paternalism” in government. He was introduced to the conservative concepts he taught in courses on economic principles and the economics of international peace by his elder brother, the late Frank Knight, widely honored as the founder of the “Chicago school of economics.”

A native of Colfax County, Ill., Knight attended Texas Christian University and earned a B.A. from the University of Utah in 1920 and an M.A. from the University of Michigan in 1923.

He taught economics at the University of Michigan and the University of Wisconsin, where he met his wife, the former Myrtle Eickelberg. He joined the Dartmouth faculty as an instructor in economics in 1924 and became a professor in 1934. He was also a member of Sigma Chi fraternity and had served for a number of years on the Dartmouth College Athletic Council.

Knight wrote three books on economics and a book on peace, entitled How to Run a War, published by Alfred Knopf in 1936. Despite his authorship of these four books and a solid record of writing for scholarly journals, he opposed the academic doctrine of “publish or perish.” He felt that faculty members should only write when they wished, not simply to gain recognition and status. He was cited by the Freedom Foundation of Valley Forge, Pa., for an article he wrote in the Dartmouth Alumni Magazinein December 1949 entitled “Our Greatest Issue,” which he identified as “pseudo-liberalism.”

During World War I, he served with the U.S. Army infantry for two-and-a-half years, including more than a year in the Philippines.

Knight had also been an avid baseball fan ever since his days as a pitcher in college, and he rarely missed a Dartmouth varsity baseball game.

He is survived by his wife, a son, a daughter, three brothers,aand two sisters.

 

Source:  Dartmouth Alumni Magazine June 1980, p. 93.

Image Sources:

Die Drei von der Tankstelle, classic German film from 1930.

Melvin Moses Knight from National Archives and Records Administration (NARA); Washington D.C.; Roll #: 366; Volume #: Roll 0366 – Certificates: 54301-54700, 31 May 1917-06 Jun 1917.

Bruce Winton Knight from Dartmouth Alumni Magazine, February 1954, p. 18.

Categories
Chicago Economics Programs Economist Market

Chicago. Draft memo of a program to rebuild the department of economics by T.W. Schultz, 1956

 

The following draft memo by T. W. Schultz outlines the serious faculty replacement needs of the University of Chicago department of economics in the mid-1950s. Particularly noteworthy, aside from the impressive list of lost faculty, is the appended table listing the sponsored research/3rd party funders of the economics department at that time. One also sees that the department had been authorized to make offers to Kenneth Arrow, Robert Solow and Arthur F. Burns. So much for the best-laid plans of mice and men. A better historian of economics than I might spin a counterfactual tale of a post-Cowles Chicago with Arrow and Solow on the faculty.

Regarding the ICA Chile Enterprise: Economic Research Center, Schultz wrote “The Chilean enterprise will give us a fine ‘laboratory’ in which to test ourselves in the area of economic development– a major new field in economics.” This reminds me of the old Cold-War Eastern European joke about whether Marx and Engels were scientists (“No, real scientists would have tried their experiments on rats first”). What a “fine ‘laboratory'” for testing oneself!

_________________________

A Program of Rebuilding the Department of Economics
(first draft, private and confidential – T. W. Schultz, May 22, 1956)

Your Department of Economics has been passing through a crisis. Whether it would survive as a first rate department has been seriously in doubt, with one adversity following another as was the case up until last year. It is now clear, however, that we have achieved a turning point in that we can rebuild and attain the objective which is worth striving for – an outstanding faculty in economics.

The crisis came upon us as a consequence of a combination of things: (1) the department, along with others in the University, had been denied access to undergraduate students of the University who might want to become economists; (2) Viner left for Princeton, Lange for Poland, Yntema for Ford and Douglas for the Senate; (3) the Industrial Relations Center drained off some of our talent and when it jammed, Harbison left for Princeton; (4) Mr. Cowles’ arbitrary decision to shift “his” Commission to Yale was a major blow; (5) Nef been transferring his talents to the Committee on Social Thought, and (6) add to all these the retirement of Knight.

Meanwhile, there were several external developments which did not reduce our difficulties: (1) a number of strong (new) economic centers were being established – at Stanford, Johns Hopkins, Yale, Vanderbilt, M.I.T. and with public funds at Michigan and Minnesota; (2) our salaries were falling behind seriously relative to some of the other places, and (3) recruiting of established, highly competent economists became all but impossible given the crisis that was upon us and the (then) low repute of the University neighborhood.

The ever present danger of the past few years has been that we would be in the judgment of competent colleagues elsewhere, in the beliefs of oncoming graduate students and in the eyes of the major foundations – not recover our high standing but instead sing to a second or even a third-rate department and in the process lose the (internal) capacity to recruit and rebuild.

We now have achieved a turning point distinctly in our favor.

The major efforts which have contributed most have been as follows:

  1. We have taken full advantage of our unique organization in combining real research with graduate instruction. Our research and instruction workshops are the result. The Rockefeller Foundation gave us three grants along the way – agricultural economics, money and public finance – to test this approach and advanced graduate work. The Ford Foundation has now financed our workshops with $200,000 (eight 5-year grant) (our proposal of January 1956 to The Ford Foundation states the theory and argues the case for this approach on the basis of the experiences we have already accumulated).
  2. We set out aggressively to recruit outstanding younger economists. The workshops were a big aid to us in doing this; so was the financial support of the University. We had the ability to “spot them”. We now have the best group of talented young economists, age 30 and less, to be found anywhere. This achievement is rapidly becoming known to others in keen “competition” is already upon us as a consequence.
  3. We need urgently to run up a lightning rod, a (rotating) professorship with a salary second to none, to attract talent and make it clear we were in business and would pay for the best. The Ford Foundation took favorably to the idea. (Thought so well of it that they will do the same for 3 other privately supported Universities – Columbia, Harvard and Yale!)
    The $500,000 endowment grant from them for a rotating research professorship is our reward.
  4. The foundations have given us a strong vote of confidence: grants and funds received by the Department of Economics during 1955-56 now total $1,220,000. (A statement listing these is attached).
  5. The marked turn for the better in the number and the quality of students applying for scholarships and fellowships is, also, an affirmative indication.
  6. The Economics Research Center is filling a large gap in providing computing, publishing and related research facilities which was formally a function of the Cowles Commission.
  7. The Chilean enterprise will give us a fine “laboratory” in which to test ourselves in the area of economic development – a major new field in economics.

There remains, however, much to be done. We must, above all, not lose the upward momentum which is now working in our favor.

Faculty and University Financial Support

To have and to hold a first rate faculty in economics now requires between $225,000 and $250,000 of University funds a year.

To have a major faculty means offering instruction and doing research in 8 to 10 fields. Up until two years ago we came close to satisfying the standard in our graduate instruction. We then had 11 (and just prior to that, 12) professors on indefinite tenure.

Then, Koopmans and Marschak were off to Yale, Harbison to Princeton and Knight did reach 70. And, then there were 7. On top of these “woes” came the serious illness of Metzler which greatly curtailed his role; and, Nef having virtually left economics. Thus, only 5 were really active in economics with Wallis carrying many other professional burdens. Meanwhile we added only one – Harberger was given tenured this year.

Accordingly at the indefinite tenure level we are down to about one-half of what is required to have a major faculty. Fortunately, several younger men have entered and have been doing work of very high quality.

It should be said that the Deans and the Chancellor have stood by, prepared to help us rebuild.

Major appointments were authorized – Arrow, Stigler, Solow and others. We still are hoping that Arthur F. Burns will come.

The resignations and the retirement, however, did necessarily reduce sharply the amount of financial support from the University.

In rebuilding, at least five additional tenure positions will be required:

  1. Labor economics (from within)
  2. Trade cycle (we hope it will be Arthur F. Burns, already authorized).
  3. Money
  4. Econometrics and mathematical economics.
  5. Business organization
  6. Consumption economics (when Miss Reid retires; next 3 years we shall have the extra strength of Dr. D. Brady with finances from The Rockefeller Foundation)
  7. International trade (pending Metzler’s recovery)
  8. Economic development.

The faculty and the University financial support recommended is as follows:

Tenured positions (for individuals fully committed to economics).

    1. Now in the harness

6: Friedman, Johnson, Harberger, Hamilton (Metzler), Wallis (Nef), Schultz

    1. To be added

5: Burns pending, (labor), (money), and two other fields, most likely econometrics and business organization

 

Budget:

11 [tenured positions]

  

$165,000
Metzler and Nef $15,000
$180,000
III. Supplementary non-tenure faculty $45,000
Altogether $225,000

 

Outside Financial Support for the Department of Economics

Grants

 Amount of grant Available 1956-57

A. Received during 1955-56.
1.     Sears Roebuck Fellowships

$4,000

$4,000
2.     National Science Foundation (2 years)

$13,000

$6,500
3.     Conservation Foundation (2 years)

$33,000

$16,500
4.     Rockefeller Foundation: consumption economics (3 years)

$45,000

$15,000
5.     American Enterprise (2 years)

$17,250

$8,625
6.     Ford Foundation: research and instructional workshops (5 years)

$200,000

$30,000
7.     Earhart Fellowships.

$6,000

$6,000
8.     S.S.R.C. Student Grants

$5,000

$5,000
9.     Ford Foundation: 3 pre-doctoral grants

$10,200

$10,200
10.  Ford Foundation: faculty research grant (Hamilton)

$12,500

$8,000
11.  ICA Chile Enterprise: Economic Research Center Fellowships, research support (3 yrs)

$375,000

$125,000
12.  Ford Foundation: endowment for rotating research professor

$500,000

$25,000
13.  Rockefeller Foundation: Latin America (Ballesteros)

$5,000

$5,000

Sub-totals

$1,225,950

$264,825

B. Received prior to 1955-56 where funds are available for 1956-57.
1.     Rockefeller Foundation: workshop in money (3 years with one year to go)

$50,000

$20,000
2.     Rockefeller Foundation: workshop in public finance (3 years with one year to go)

$50,000

$20,000
3.     Resources for the Future (3 years with one year to go)

$67,000

$27,000
4.     Russian Agriculture (2 years with one to go)

$47,000

$22,000

B sub-totals

 $214,000 $89,000

A and B totals

$1,439,950

$353,825

 

Source:  University of Chicago Archives. Department of Economics Records. Box 42, Folder 8.

Image Source: 1944 photo of T.W. Schultz from University of Chicago Photographic Archive, apf1-07479, Special Collections Research Center, University of Chicago Library. Cf. Wikimedia Commons, same portrait (dated 1944) from Library of Congress.

Categories
Chicago Curriculum Regulations

Chicago. Intradepartmental discussion, graduate microtheory prerequisite. 1928.

 

Within an academic year there is often a natural ordering for a two-semester or three-quarter course sequence that allows the later courses to build on the course(s) that preceded it. With the growing depth of economic theory by the 1920s at the latest, more than a single course year was understood to be required to get up to research speed. We can add to this the further complicating fact of graduate programs being fed from a variety of undergraduate programs. It then becomes necessary to get excruciatingly explicit about the course content of prerequisites. 

The memos transcribed below make it clear that a “stiff” sophomore-level “value and distribution theory” course as taught in the College at the University of Chicago would constitute the minimum preparation to begin the study of neo-classical economics à la Viner in 1928. It is also noteworthy that the “powwow” of Chicago economists named in L. C. Marshall’s first memo below appeared to consider the course on “Contemporary Continental Economic Thought” a different species altogether, not requiring even intermediate microeconomic theory as a prerequisite.

________________

Economic Theory Course Numbers and Titles

General Survey Course [undergraduate]

102, 103, 104. The Economic Order I, II, III. Professor [Leon Carroll] Marshall and Others.

Intermediate Course [undergraduate]

201. Intermediate Economic Theory. Professor [Paul Howard] Douglas, Associate Professor[Lewis Carlyle] Sorrel and Assistant Professor [Garfield V.] Cox

[Graduate Theory Core]

301, 302, 303. Introduction to the Graduate Study of Economic Theory

301. Neo-Classical Economics. Professor [Jacob] Viner
302. History of Economic Thought. Professor [Frank Hyneman] Knight
303. Modern Tendencies in Economics. Professor [Jacob] Viner

309. Contemporary Continental Economic Thought. Mr. [Paul Howard] Palyi

 

Source:  University of Chicago, Annual Register with Announcements for the Year 1927-1928, pp. 162-163.

________________

3 Memos: Marshall to Viner to Marshall to Viner

The University of Chicago
Department of Economics

January 13, 1928

Memorandum

To: J. Viner
From L. C. Marshall

Before Knight left us we had a long powwow about the theory situation as it seemed to have developed through the autumn quarter. [Frank Hyneman] Knight, [Lionel D.] Edie, [Theodore Otte] Yntema, [Henry] Schultz, [William Homer] Spencer and myself participated.

Here are the results of the conference:

1) It was agreed that neither 201 nor 301 should be regarded prerequisite to 309.

2) It was agreed that a person taking 301 could not wisely take 309.

3) It was agreed that 201 could not properly be made prerequisite for 301 since most of the students taking 301 do not come up through our own organization.

Do you see any difficulties with this arrangement?

[signed]
L. C. Marshall

LCM:GS

*  *  *  *  *  *  *  *  *

The University of Chicago
The Department of Economics

Memorandum to L. C. Marshall from J. Viner. Jan. 20, 1928

(1) I do not know enough about the purposes and scope of 309 to be able to express an intelligent opinion.

(2) Do. [ditto]

(3) I do not see why 201 or its equivalent should not be demanded as a prerequisite for 301, any stiff undergraduate course in price and distribution being regarded as the equivalent of 201. For undergraduates wanting to take 301 as undergraduates it seems to me clear that 201 should be insisted upon as a prerequisite.

J.V.

*  *  *  *  *  *  *  *  *

[Memorandum to] Mr. Jacob Viner [from] Mr. L. C. Marshall. Feb. 9, [192]8

In reply to your note of January 20 in which you say “I do not see why 201 or its equivalent should not be demanded as a prerequisite for 301, any stiff undergraduate course in price and distribution being regarded as the equivalent of 201. For undergraduates wanting to take 301 as undergraduates it seems to me clear that 201 should be insisted upon as a prerequisite.”

I judge that this means that no substantial difference of opinion exists between you and the group that talked the matter over. Apparently you would regard a sophomore course in the principles of economics (the usual thing in American colleges) as being an equivalent of 201 for purposes of stating the prerequisite for 301. This being true, what would you think of stating the prerequisite thus:

Prerequisite: a good undergraduate course in value and distribution.

It seems wise specifically to mention value and distribution for the expression “principles of economics” has no one meaning as far as undergraduate instruction is concerned.

LCM:GS

 

Source:  University of Chicago Archives. Department of Economics. Records.Box 35, Folder 14 “Economics Department. Records & Addenda”.

Image Source: University of Chicago Photographic Archive, apf1-08488, Special Collections Research Center, University of Chicago Library. The photograph is dated 14 June 1944.

Categories
Bibliography Chicago

Chicago. Course Bibliography (books). Economics and Social Institutions. Knight, 1949

 

 

Together Frank Hyneman Knight (Morton D. Hull Distinguished Service Professor of the Social Sciences) and Charner Marquis Perry (Associate Professor of Philosophy) taught a course at mid-century on institutional economics with the title “Economics and Social Institutions”. The course was a joint graduate offering of the departments of economics and philosophy at the University of Chicago. This post provides a transcription of a bibliography of books for the course that was found filed among Milton Friedman’s papers at the Hoover Institution Archives. One presumes from the title “Bibliography A: Books” that there must have been a “Bibliography B: articles and chapters”, but to find a copy of that B-Bibliography, we will need to go elsewhere and have a bit of luck.

_______________

Course Announcement

[Economics] 305. Economics and Social Institutions (identical with Philosophy 305). The relations between the classical mathematical and the institutional historical views of economic phenomena; institutional factors as the framework and much of the content of the price economy; late nineteenth-century economic society as a complex of structural forms. Prereq: Econ 301 and some European economic history. Win: M 3:30-5:30; Knight, Perry.

 

Source:  University of Chicago. Announcements, Sessions of 1950-1951. Volume L, No. 3 (June 1, 1950), p. 29.

_______________

ECONOMICS AND SOCIAL INSTITUTIONS.
(ECON. 305; Philos. 305)

BIBLIOGRAPHY—A:  BOOKS.
(WINTER, 1949)

Ardzrooni, L. (Ed.)—Essays in our Changing Order (Veblen)

Ayres, C.E.—The Theory of Economic Progress

Ibid.—The Economic Order
Ibid.—The Divine Right of Capital

Ballard, L.V.—Social Institutions

Barnes, Harry E.—History and Prospects of the Social Sciences

Ibid.—Intellectual and Cultural His. Of the Western World

Barth, Paul,—Die Philosophie der Geschichte als Sociologie

Barnes, H.E. and Becker,—Social Thought from Lore to Science

Beard, Miriam,—History of the Business Man

Bucher, Karl,–Industrial Evolution

Bury, J.B.—The idea of Progress

Ibid.—History of Freedom of Thought
Ibid.—Evolution and History (in Evolution in Modern Thought)

Clark, John M.—Essays in Social Economics

Commons, John R.—Institutional Economics

Ibid.—Legal Foundations of Capitalism

Dewey, John,–Influence of Darwin on Philosophy

Dickinson, H.D.—Institutional Revenue

Dorfman, Joseph—Thorstein Veblen and His America

Engel-Janozi, Fr.—Growth of German Historicism

Einstein, Lewis,–Historical Change

Evolution in Modern Thought, (Mod. Lib.—Various authors)

Gambs, John S.—Beyond Supply and Demand (Bibliog., short)

Gras, N.S.B.—Introduction to Economic History

Ibid.—Business and Capitalism

Gruchy, Allan L.—Modern Economic Thought; The American Contribution

Hamilton, Walton H.—The Pattern of Competition

Hayes, E.C. (Ed.)—Recent Developments in the Social Sciences (J.M. Clark)

Hertzler, J.O.—Social Institutions

Herskovits, J.M.—The Economic Life of Primitive Peoples

Homan, Paul T.—Contemporary Economic Thought

Hook, Sidney,—From Hegel to Marx

Ibid.—Toward the Understanding of Karl Marx

Huxley, Julian,—Evolution

Jones, Richard,—Introductory Lecture on Political Economy

Keynes, J.N.—Scope and Method of Pol. Econ. (Esp. Chaps. IX, X)

Korsch, Karl,—Karl Marx

Miller, Hugh,—History and Science

Mitchell, Wesley C.—The Backward Art of Spending Money, etc.

Mitchell, William,—The Early History of the Law Merchant

Morgan, C. Lloyd,—Emergent Evolution

Ibid.—The Emergence of Novelty

Mukerjee, R.—The Institutional Theory of Economics

Mumford, Lewis,—Technics and Civilization

Müller-Lyer,—A History of Social Development (Econ. Stages)

Murchison, C. (Ed.)—Psychologies of 1925

Ogburn, William F.—Social Change

Ibid., and Goldenweiser, E.A.—Social Sciences in Interrelations

Parsons, Talcott,—The Structure of Social Action

Pound, Roscoe,—Interpretations of Legal History

Rice, Stuart A. (Ed.)—Methods in Social Science

Robertson, H.M.—The Rise of Economic Individualism

Sapir, Edward—Language (Chs. 7-8 on linguistic change)

Sée, Henri,—The Economic Interpretation of History

Ibid.—Modern Capitalism (Les origins de cap. modern)

Seligman, E.R.A.—The Economic Interpretation of History

Shotwell, J.T.—Introduction to History of History (Introduction and last chapter)

Simiand, François,—La méthode positive en économie politique

Small, A.W.—The Origins of Sociology (Historism and Methodenstreit)

Sombart, Werner,—The Quintessence of Capitalism

Ibid.—Die drei Nationalökonomien; Der moderne Kapitalismus

Spengler, O.—Decline of the West

Sumner, William G.—Folkways

Tawney, R.H.—Religion and the Rise of Capitalism

Teggart, F.J.—The Theory of History

Teggart, R.V.—Thorstein Veblen

Toynbee, A.—The Study of History

Troeltsch, Ernst,—Der Historismus; Other works

Tugwell, R.G. (Ed.)—The Trend of Economics

Veblen, Thorstein B.—The Place of Science in Civilization, etc.

Ibid.—(W.C. Mitchell, Ed.)—What Veblen Taught

Ibid.—(L. Ardzrooni, Ed.)—Essays in our Changing Order

Weber, Max,—Protestantism and the Spirit of Capitalism (Tr. Parsons)

Ibid.—General Economic History (Tr. Knight)

Ibid.—Wirtschaft und Gesellschaft (Tr. in part, Parsons, Anderson)

*  *  * *  *  *

Economic History. Heaton; Knight, Barnes and Fluegel, etc.

Histories of Economic Thought, on “schools”; on the substance, esp. Edmund Whittaker, History of Economic Ideas, first 7 Chaps.

Encyclopedias, especially Encyclopaedia of the Social Sciences. Especially articles on Economics, Secs. on Historical and Institutional Schools and on Economic History; also on Institutions, etc., etc.

 

Source:  Hoover Institution Archives. Papers of Milton Friedman. Box 77, Folder 5 “University of Chicago, Econ. 305”.

Image Source: Frank H. Knight from University of Chicago Photographic Archive, apf1-03513, Special Collections Research Center, University of Chicago Library.

Categories
Chicago Economists

Chicago. Economics Department on Possible Candidate for Permanent Employment, 1950

 

How big was the split within the department of economics in 1950 at the University of Chicago? Judging from the decision by chairman T. W. Schultz to essentially table the matter of approaching the central university administration with a candidate for a permanent position, there was a departmental deadlock.

The half-dozen economists discussed were: George Stigler, Abba Lerner, Kenneth Boulding, Leonid Hurwicz, Kenneth Arrow, and Lawrence Klein. Contemplate those names for a moment and then read aloud the following two sentences:

Several members of the Department stated that none of these men had all of the qualities sought: a good mind reaching out fruitfully in new directions in economics. It was agreed, however, that there were no likely candidates possessing these qualities in a high degree.   

We can only speculate which alpha economists happened to lock horns in those three meetings.

_________________________

From the MINUTES, Meeting of the Department,
May 24, 1950.

Present: T. W. Schultz, T. Koopmans, A. Rees, H. G. Lewis, D. G. Johnson, E. J. Hamilton, R. Burns, J. Marschak, F. H. Harbinson, F. H. Knight, M. Friedman, B. Hoselitz, L. Metzler

[…]

II. Appointments

Schultz informed the Department that Hildreth’s position has been renegotiated for a term of three years. The Department approved a motion authorizing for Hildreth the courtesy rank of Associate Professor for a three year term.

The Department then considered the appointment problem raised by the leaving of Blough (probably initially on a one year leave of absence) and Brownlee. Schultz suggested that the Department had two alternatives open to it: a temporary replacement (construed broadly) and a permanent appointment of a top ranking person.

The Department considered first possible candidates for permanent appointment. Attention centered on George Stigler, Abba Lerner, Kenneth Boulding, Leonid Hurwicz, Kenneth Arrow, and Lawrence Klein. For a temporary appointment Schultz suggested Gunnar Myrdal.

[Meeting began at 3:30 pm and ended 5:45 p.m.]

_________________________

From the MINUTES, Meeting of the Department,
May 30, 1950.

Present: T. W. Schultz, R. Burns, D. G. Johnson, E. J. Hamilton, F. H. Knight, L. Metzler, R. Blough, F. H. Harbinson, A. Rees, H. G. Lewis, T. Koopmans, J. Marschak, M. Friedman.

Appointments

The discussion of appointments continued from the previous meeting. Schultz expressed the conviction that the time was propitious for a new permanent appointment. On Metzler’s suggestion, the Department returned to discussion of the following candidates for a permanent appointment: Stigler, Hurwicz, Boulding, Klein, Lerner, Arrow.

Several members of the Department stated that none of these men had all of the qualities sought: a good mind reaching out fruitfully in new directions in economics. It was agreed, however, that there were no likely candidates possessing these qualities in a high degree.

The chairman then polled those present with respect to their first choice (or ties for first) for a permanent appointment. As a result of the poll the list of candidates was narrowed to Hurwicz, Stigler, and Lerner. The chairman then polled those present on their position toward permanent appointment of each of these men.

The poll showed that of those present

4 would favor and 5 oppose the permanent appointment of Hurwicz
4 would favor and 5 oppose the permanent appointment of Lerner
6 would favor and 6 oppose the permanent appointment of Stigler

A motion was passed instructing the chairman to poll the absent members of the Department in the same way on the appointment of Hurwicz, Lerner, and Stigler and to report back to the Department for further discussion.

[Meeting began at 3:30 pm and ended 6:15 p.m.]

_________________________

From the MINUTES, Meeting of the Department,
June 8, 1950.

Present: T. W. Schultz, H. G. Lewis, D. G. Johnson, J. Marschak, H. Kyrk, P. Thomson, M. Friedman, T. Koopmans, A. Rees, E. J. Hamilton, F. H. Knight, R. Blough.

Appointments

Schultz reported that he had polled Kyrk, Thomson, Mints, and Nef (but had not heard from Goode) on the matter of a permanent appointment for Stigler or Hurwicz or Lerner. The upshot of the poll was that the Department, the Chairman not voting, was evidently divided in its rating of Stigler for a permanent appointment; both permanent members and temporary members of the faculty showed an even division. The Chairman explained that he would abstain from voting on the belief that the Department was not now prepared to advance, with a strong meeting of minds, a strong case to the Central Administration for a permanent appointment. Schultz proposed that we investigate a slate of names for a one-year appointment.

A motion was passed authorizing the Chairman to put Gunnar Myrdal in the first position on the slate for a one-year appointment.

Successive motions passed by the Department added the following names to the slate:

Nicholas Kaldor   Simon Kuznets
Arthur F. Burns
H. M. Henderson
W. Vickrey
A. Hart
H. Stein

The Department then, following the system of ranking used in fellowship appointments, ranked these seven persons. The rank order follows:

1. Kaldor
2. Burns
3. Henderson
4. Kuznets
5½. Vickrey
5½. Hart
7. Stein

[Meeting began at 3:30 pm and ended 6:00 p.m.]

Source: University of Chicago Archives, Department of Economics Records, Box 41, Folder 12.

Image Source: Social Science Research Building.  University of Chicago Photographic Archive, apf2-07466, Special Collections Research Center, University of Chicago Library.