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Harvard. Economic Principles and Public Policy. Syllabus, readings, questions. Schelling, 1981

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In my opinion Thomas C. Schelling (1921-2016) has achieved something greater than the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (2005). The history of economics will remember him as the very model of a modern thinking economist’s economist.

The earlier post for the reading list and final exams from his 1970 Harvard course “Conflict, Coalition and Strategy” has been viewed nearly 19,000 times, making it the highest single post in the eleven year history of Economics in the Rear-view Mirror.

The purpose of today’s post is to provide a digital, transcribed version of Schelling’s 1981 course materials for “Economic Principles and Public Policy” assembled from a PDF file of the scanned copy of this material compiled and published by Ed Tower in his Eno River Press Collection in Economics. In this form, it will be even easier to access, search, copy, and paste from.

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Where to Find the Motherload

The Eno River Press Collection in Economics, compiled by Duke professor (now emeritus) Ed Tower, is the motherload of syllabi, problems sets, and exams from economics courses taught over roughly two decades at the end of the 20th century. Thanks to the initiative of Steven Medema, this material has been digitized and made available as .pdf files: 1980 (15 vols.); 1981 (25 vols.); 1990 (25 vols.); 1995 (25 vols.). There is an analogous set of volumes, likewise available in business administration.

Professor Ed Tower came to Duke in 1974. He received his Ph.D. in Economics from Harvard in 1971. He has held appointments at the Australian National University, the University of Auckland in New Zealand, the Economics Institute, the Fletcher School of Law and Diplomacy at Tufts University, the Helsinki School of Economics and Business Administration, Nanjing University in the Peoples’ Republic of China, and Simon Fraser University in Canada. He has also consulted on economic development problems at the World Bank and the U.S. Agency for International Development, and in Indonesia, Kenya, Malawi, and Sudan, and has written on development problems in Malaysia, the Peoples’ Republic of China, and Taiwan.
Source: Duke Economics Department, WWW Resource.

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Undergraduate Course

HARVARD UNIVERSITY
Economic Principles and Public Policy
Economics 1021
Spring 1981

T. C. Schelling

Course Outline and Reading Assignments

All readings listed are assigned; none are optional.

Books Required to Purchase:

Robert H. Haveman and Julius Margolis, Public Expenditure and Policy Analysis, second ed. (paperback), Rand McNally, 1977.

Robert Dorfman and Nancy Dorfman, Economics of the Environment, second ed., W.W. Norton and Company, 1977.

Richard Goode, The Individual Income Tax, revised ed. (paperback), The Brookings Institution, 1976.

Charles L. Schultze, The Public Use of Private Interest,
The Brookings Institution, 1977.

Arthur M. Okun, Equality and Efficiency, The Brookings
Institution, 1975.

T.C. Schelling, Micromotives and Macrobehavior, W.W. Norton and Company, 1978.

Harold M. Hochman, The Urban Economy, W.W. Norton and Company, 1976.

Book Required to Obtain:

Your Income Tax, Publication 17, Internal Revenue Service,
not for sale.

Note: The class meets in lecture 13 times before Spring Recess. Reading assignments for the 8 meetings after Spring Recess will be distributed later. Sections will meet each week except the first week and the week before Spring Recess.

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Outline and Readings

		Pages	Meetings
I.	Lives and Decisions	136 (Cumul-ative totals in parentheses)	3
	Chase, Samuel B., (ed.), Problems in Public Expenditure Analysis, The Brookings Institution, 1968, pp. 127-176. Vaupel, James W. and John D. Graham, “Egg in Your Bier?”, The Public Interest, No. 58, Winter 1980, pp. 3-17. Zeckhauser, Richard, “Procedures for Valuing Lives,” Public Policy, Fall 1975, pp. 419-464. Lave, Lester B. and Eugene P. Seskin, “Air Pollution and Human Health,” in Robert Dorfman and Nancy S. Dorfman, Economics of the Environment, 2nd ed., W.W. Norton & Co., pp. 422-449.
II.	Policy: Why Things May Not Take Care of Themselves	177 (313)	2 (5)
	Haveman, Robert H. and Julius Margolis, Public Expenditure and Policy Analysis, 2nd ed., 1977, Introduction, pp. 1-24. Davis, Otto A. and Morton I. Kamien, “Externalities, Information and Alternative Collective Action,” H and M, pp. 82-104. Schelling, T.C., Micromotives and Macrobehavior, W.W. Norton & Co., 1978. Ch. 1, “Micromotives and Macrobehavior,” 9-43. Ch. 3, “Thermostats, Lemons, and Other Families of Models,” 83-133. Ch. 4, “Sorting and Mixing: Race and Sex,” 137-155. Ch. 6, “Choosing Our Children’s Genes,” 193-203. Steiner, Peter O., “The Public Sector and the Public Interest,” in H and M, pp. 27-40.
III.	Examples of Market Failure	214 (527)	2 (7)
	The Environment Ruff, Larry E., “The Economic Common Sense of Pollution,” in D and D, pp. 41-58. Dales, J.H., “The Property Interface,” in D and D, pp. 172-186. Dales, J.H., “Land, Water, and Ownership,”in D and D, pp. 229-244. Mishan, E.J., “Property Rights and AmenityRights,” in D and D, pp. 245-251. Schelling, T.C., “Prices as Regulatory Instruments for Environmental Protection,”JFK School of Government, December 1980. Goldman, Marshall I., “The Convergence ofEnvironmental Disruption,” in D and D, pp. 312-325. The City Baumol, W.J. & Wallace E. Oates, “The CostDisease of the Personal Services and the Quality of Life,” pp. 57-73, in The Urban Economy by Harold M. Hochman, W.W. Norton and Co., 1976. Thompson, Wilbur, “The City as a DistortedPrice System,” pp. 74-86, in The Urban Economy. Alonso, William, “Urban Zero Population Growth,” pp. 164-179 in The Urban Economy.
IV.	Helping People	118 (645)	3 (10)
	The Conflict Between Equity and Incentives Tobin, James, “The Case for an Income Guarantee,” The Public Interest, Summer 1966, pp. 31-41. Schorr, Alvin L., “Against a Negative Income Tax,” and James Tobin, “A Rejoinder,” The Public Interest, Fall 1966, pp. 110-119. Weisbrod, Burton A., “Collective Action andthe Distribution of Income: A Conceptual Approach,” in H & M, pp. 105-131. Products Liability: Bexiga vs. Havir Mfg.Corp., Harvard Law Review, Vol. 86 (March1973), pp. 923-931. Implications of Guaranteeing Medical Care,Institute of Medicine, 1975, Schelling et al., pp. 23-37, 39-44, 53-57. Cash, Kind, or Rationing Tobin, James, “On Limiting the Domain of Inequality,” The Journal of Law and Economics, Vol. 13 (October 1970), pp. 263-277. Thurow, Lester C., “Cash Versus In-Kind Transfers,” American Economic Review, Papers and Proceedings, May 1974, pp. 190-195. Frieden, Bernard J., “Housing Allowances: An Experiment That Worked,” The Public Interest, No. 59, Spring 1980, pp. 15-35.
V.	Case Study: Day Care	68 (713)	0 (10)
	Nelson, Richard R., The Moon and The Ghetto, W.W. Norton and Co., 1977, pp. 83-103. Rivlin, Alice, “Federal Support for Child Care: An Analysis of Options,” in H & M, pp. 442-475. Bruce-Briggs, B., “‘Child Care,’ The FiscalTime Bomb,” The Public Interest, #49, Fall 1977, pp. 87-102.
VI.	Review Questions	0 (713)	1 (11)

Spring 1981
Course Plan

WEEK OF	SECTION
2/2	No sections
2/9	Problem: Right Turn on Red
2/16 [Washington’s B-Day]	Quiz
2/23	Hour Exam: Lives, Policy, Environment, City
3/2	Problem: Moral Hazard
3/9	Quiz
3/16	15 Questions Due
3/23	**** RECESS ****
3/30	Hour Exam: Helping People, Cash v Kind, Day Care, Crime, Energy
4/6	Problem: Tax
4/13	Quiz: Tax
4/20	Quiz: Tax
4/26	**** READING PERIOD ****

Source: Economics Reading Lists, Course Outlines, Exams, Puzzles & Problems compiled by Edward Tower. Vol. 20 (July 1981): Public Choice, Political Economy, and the Economics of Public Policy & Law, pp. 133-137.

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ECONOMIC PRINCIPLES
AND PUBLIC POLICY

M-228 & ECONOMICS 1021
Spring 1981

T. C. Schelling
Harvard University

The Income Tax

These questions are prompted by a reading of the Form 1040. Some of the questions will be discussed in class, some are for your reflection and study. The purpose is to alert you to the kinds of questions and issues that almost any line in the tax form can raise. Several hours can be devoted to the economic philosophy underlying income taxes, discerning intention, recognizing administrative com-promise, analyzing incentives, and evaluating the income tax as an instrument to achieve a variety of goals. It need not be viewed as a coherent philosophy or a set of integrated and compatible purposes; searching for inconsistencies or obsolete details, and reflecting on historical processes and political compromises, are part of the exercise.

Page 1 of Form 1040

Why “income rather than “wealth?”
What difference does it make whether income or wealth is the subject of the tax?
Why is the calendar year the unit of accounting?
What provisions modify this annual slicing?
What would be an ideal accounting period, or is there one?
What incentives result from slicing time into annual units?
Should a married couple be treated as a single unit, as two persons, or allowed some choice in how to file?
Do you perceive any incentives on marriage and divorce?
What reason can you think of for the extra exemption for the blind, not for the deaf or the crippled?
Why might blindness be exactly equivalent to one dependent?
Should blindness be treated as an exemption or a tax credit?
What are the differences between this kind of help for the blind and cash grants not related to income?
Should the allowance for a dependent be a constant amount of income, irrespective of bracket? Should it instead be graduated, so that the differential between a large and small family at high income is greater than the differential at a lower income? Should it be a tax credit rather than an exemption?
Is there an implied philosophy about family, children, and birth, in this treatment of dependents? Does it imply that children are:

1) a consumer good,
2) an insurable accident,
3) a productive asset,
4) a social obligation?

Are there incentives on family size or timing due to this treatment of dependents?

What is the argument for including capital gains as a kind of income? Alternatively, what is the argument for not treating them the same as income?
Why distinguish long-term from short-term? Is this an anti-gambling or anti-speculation bias? Is it expected or intended to have incentives on the holding of securities?
Why are only “realized” gains taxed, so that if your stock or property rises in value you pay no tax unless you sell it?
What are the incentives: do people get “locked in” to property holdings that have risen in value, having to hold it rather than exchange it for other stock and property?
Why is a special exemption made for the sale of one’s own house?
Should gambling gains and losses be treated like any other income?
Should they be ignored altogether and left untaxed?
Does the treatment discriminate against “pure” gambling but not against gambling on the commodity or stock market?
Is this treatment consistent with the increasing popularity of state lotteries, off-track and on-track betting, etc.?
What effect will the treatment of gambling gains and losses have on the ability of legal gambling to compete with illegal gambling?
Can you guess what kinds of “employee business expenses” a typical university professor will take credit for on his tax return? Do you expect any incentives, such as the likelihood of having better office equipment, more telephone extensions, better personal libraries, if they are tax-deductible?

Schedule A

Itemized deductions: Is there a single rationale for the items deductible? Is it:
1. 1. to get at a better accounting of income
  2. to encourage expenses of the kinds that have been made deductible.
  3. to compensate for special hardships and obligations;
  4. or what?
Why is medical care somewhat deductible?
How does treatment of medical care discriminate between the poor and the well-to-do?
Could you estimate the “cost” to the Internal Revenue Service (or to other taxpayers if they would have to make it up in higher tax rates) of this treatment of medical care?
If you could redistribute an equivalent amount, to compensate people for an injury and illness and disability, would you rather distribute it in a manner unrelated to income or income taxes?
Can you find a plausible explanation of the quantitative treatment of medical care: e.g., 1/2 of insurance premiums; excess over 3% of income; subtracting out 18 in line 3; etc.
How would you prefer to treat funeral expenses? Should sanitary or tasteful disposal of a dead body be treated as a terminal medical expense? Can you think of good reasons for the actual treatment of this item?
What contributions are tax-deductible, and why?
Is this equivalent to a subsidy of churches by the federal government?
Is the object to stimulate contributions?
Is this a useful way to decentralize federal subsidies, by a system of “matching grants” to anybody who wants to support his favorite charity?
Who has more leverage in determining where the IRS makes its contributions, a poor or a rich person?
What do you think are the most questionable “contributions,” the ones about which it is hard to decide whether they are within the spirit of the income tax?
Is it a “contribution” if I make a sizable gift to a private school in hopes that they will give priority admissions to my children?
Can I unload a library that I’ve grown tired of, and treat it as a cash “gift” to the University?
Suppose I make the gift and the recipient throws it away?
Suppose I make a “gift” to a nursing home that is really a disguised bill for the care of an aged relative, but the nursing home winks and lets me “pay” the bill in a tax-deductible way?
Why should the interest you pay be deductible? (Interest you receive is taxable.) Does this put a distortion in the incentive structure–regarding, say, mortgaged homes vs. outright ownership–or does it eliminate a distortion?
Is the treatment of “casualty losses” equivalent to insurance handled by the Treasury?
Does it discriminate in favor of the rich, the poor, the property-less, or the property owners?
Could the treatment of casualty losses have any influence on the insurance that people purchase?
If I smash my car and somebody else’s, and he sues me for damage and I pay, should both parts of the loss be deductible, or only the damage to my own car?
Why allow deductions for taxes paid to state and local government but not other federal taxes?

General Questions

It has been argued that employees of the federal government ought not to pay income tax: they are simply returning part of their salary. If they were exempted from tax we could lower their pay to the “after taxes” level, saving them the trouble of making out returns and the IRS the trouble of processing them. Do you see objections to that procedure?
Do your objections apply equally to state taxation of incomes earned in state employment?
Children who are eighteen or younger count as dependents, no matter how much income they had. Should we reexamine this age, as voting ages, draft ages, and ages over which juvenile courts have jurisdiction change as the years go by, and with the increasing independence of teenage “dependents?”
A child with income abruptly ceases to be a dependent at age nineteen. Would there be advantage in having dependency taper off gradually?
In earlier years, military combat pay was excluded from taxable income.
Why would the federal government prefer to do it that way rather than with an outright pay increase?
It has recently been proposed to exempt all military pay from federal taxation. What are the reasons for and against?
If you and your employer both pay a percentage of your salary into a retirement fund, should your part not be treated as income and subject to taxation? Should his?
If the retirement fund invests it, should the accrual of interest and dividends to your retirement account be currently taxable?
How much flexibility should the IRS allow you in putting part of your income into a retirement fund, temporarily beyond reach of the income tax?
Suppose your retirement fund permits you to withdraw from it in an emergency? Does that make it just an investment fund to escape the income tax?
Suppose you cannot withdraw it but you can borrow against it.
Is it only a pretense that it is still there and you have not drawn it down to spend it?
What general purpose do you see in permitting contributions to a retirement account to evade immediate taxation, but not any other form of saving that is invested for the sake of deferred consumption? Is this just another subsidy for incentives, or is there some logical reason to exempt this contribution, as being not “earned” until one is legally able to draw on it after retirement?
Consider some income that is not subject to tax–either legally immune, or just practically uncollectible (evasion being easy and people willing to evade in the belief that others do).
Specifically, tips to waiters and waitresses. who do you think benefits from untaxed tips?
What do you think the effect is on waiters’ wages and the prices of restaurant meals? Does your answer depend on the income earned by waiters?
Think of some untaxed fee or salary supplement in a high income bracket, and answer the same question–e.g., untaxed fees of abortionists when abortion was illegal.
Can you make any general proposition about who benefits to what extent when any identifiable kind of income goes untaxed, either because it is legally exempt or because the tax is regularly evaded?

Beneficiaries and Incentives

Select some disadvantaged or underpriviledged group that you would like to help with extra income at government expense.
1. What is the best device you can think of that might be incorporated in the income tax to serve that purpose?
2. Compare that income-tax measure with the best alternative measure (not involving the income tax) that would serve the same purpose.
3. How much of the tax benefit (i.e. the tax loss to the government) is likely to go to the people whom you did not especially wish to receive the benefit? How serious an inefficiency is that?
4. How many of the people you would like to help are not reached by your proposed tax measure, and how serious is that inefficiency?
Select an activity that you would like to stimulate at government expense.
1. What is the best device you can think of that might be incorporated in the income tax to serve that purpose?
2. Compare that income-tax measure with the best alternative measure (not involving the income tax) that would serve the same purpose.
3. How much of the tax benefit is likely to go to taxpayers whose activity is unaffected by your income-tax measure?
4. How would you estimate the amount of the desired activity (measured perhaps in the increase in taxpayer expenditure on it) induced per dollar of lost tax revenue?
Discuss the incentives in the income tax that affect the following. Indicate the direction in which they affect it, the likely magnitude of the effect, and the desirability of the incentive effect:
1. owning a home, or renting;
2. doing work around the house rather than hiring it done;
3. diverting wages and salaries into institutionalized retirement arrangements;
4. choosing among savings accounts, bonds, stocks, and real estate;
5. purchasing collision-damage auto insurance;
6. having another child;
7. housewives taking full-time jobs and getting sitters, housekeepers, cleaning help, etc., to take care at home;
8. choosing one’s occupation.
What in the income tax do you think affects the way Harvard University is administered? (For example, the health service, retirement arrangements, providing expenses rather than income to faculty, granting scholarships).
Income Tax Work Incentives
It has been argued that an income tax induces people to work less because it reduces their net hourly compensation. A person who can do extra work at $7.50 per hour may not do it if he keeps only $5.
It has also been argued that an income tax induces people to work more because it lowers their net income for any amount of work they do; to maintain desired standards of living the income tax leaves them no choice but to work more.
How would you resolve the dispute, either choosing one of these two points of view, denying them both, or finding some reconciliation between these two opposing arguments?
Taxes and the Ability to Pay
It has been argued that the income tax is unique among taxes in discriminating according to “ability to pay.” why, then, should there be additional taxes unrelated to the ability to pay? There are other taxes and they add up to as much as the income tax. Of course, in politics nobody’s perfect, and we needn’t be surprised that “ability to pay” is honored and violated at the same time. Still, there may be good reasons why an income tax is not or cannot be relied on as the sole source of revenue.

1. 1. How successfully does it tax people on their “ability to pay?”
  2. Give some good reasons for not expecting the income tax to be able to serve as the unique, universal, all-purpose tax.

1. Child Dependency Allowance
  The present income tax allowance for children is that $1000 per child can be deducted from income before calculating the tax. In taxes saved, a child is worth more in a high-tax bracket than in a low bracket. On the other hand, the expenses attributable to an extra child for a family with an income of $15,000 is probably much closer to the $1000 allowance than are the expenditures attributable to an extra child in a family of similar size with an income of $60,000.
  It can be argued that the difference between no children and three children at a family income of $60,000 is far greater than the $1000 per child allowed as untaxable income, and that it makes sense to enlarge that allowance at higher incomes.
  It can also be argued that raising the allowance at higher incomes will reduce the progressivity of the tax, allowing just another benefit to wealthier families while poorer families would get no such relief.
  1. Explain how you would choose between these two points of view, or reconcile them, in recommending how to handle children in the income tax.
  2. would your answer to (a) be any different if the dependency allowance were a tax credit rather than a deduction from income?

A tax is called “progressive” if the amount paid rises more than proportionally to income, “regressive” if less, and “proportional” if the ratio of tax to income is uniform. The word “progressive” also suggests “fair” or “liberal” and “progressive income tax” tends to have both meanings. with either meaning it is sometimes hard to determine which among two or more tax schedules, or changes in a tax schedule, or more or less “progressive,” or exactly what change in rates should be characterized as preserving the same progressivity.
Below are six income-tax schedules.
Indicate how you would go about ranking them, or comparing them, in their “progressivity.”
Would you need to know something about the underlying distribution of income to make the comparison?
If so, explain.

Income Bracket $000	Percentage rate on income in bracket
Income Bracket $000	A	B	C	D	E	F
0 – 6	0	0	0	0	0	17
6 – 12	15	10	10	0	0	29
12 – 24	20	15	13	30	5	27
24 – 48	30	25	20	30	31	45
48 – 100	50	45	33	60	45	58
100 – 200	75	70	50	70	73	79

Compared with Schedule A:

Do one or more of the schedules raise or lower all taxes in the same proportion? Which ones?

Do one or more raise or lower all taxes by the same proportion of income? Which ones?

Do one or more raise or lower all income after taxes in the same proportion? Which ones?

Does one or more of them have the same progressivity as A?

Do any two of them have the same progressivity as each other?

Among them all, including A, which is least progressive and which most, and how do you rank the others?

NOTE: Because the rates go stepwise, any change will affect somewhat differently people at different points within a bracket. I suggest you make the comparisons at the bracket limits, i.e. at $6, $12, $24, $48, $100, and $200.

Source: “The Income Tax”. Photocopy reproduced in Economics Reading Lists, Course Outlines, Exams, Puzzles & Problems compiled by Edward Tower. Vol. 12 (July 1981): Public Finance Exams, Puzzles & Problems, pp. 9-17.

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T. C. Schelling/Harvard University
ECONOMIC PRINCIPLES
AND PUBLIC POLICY
Spring 1981

Ec. 1021
M- 228

EXAM QUESTIONS FROM EARLIER YEARS

Proposed Policies for Evaluation
Swine Flu Vaccination
55-Mile Speed Limit
Worth of Saving Lives
Crime Rates and Police Coverage
Fire Protection
Smoking in Class
Saturday Sections
Apartment House Heating
Deposit on Cans and Bottles
Smoking in Class: Another Room
Library Air Conditioning
State-University Tuition
Nursery Schools
Youth Fare
Welfare and Work Incentives
Dining Hall Problem
University Parking
Vouchers, Goods- (services)-in-Kind, or Cash
Gasoline Mileage
Elasticity of Response
Property-Tax Exemption for Veterans
Incentive Effects of Private Insurance
Overbooked Airline
Environment in the USA and the USSR
Insurance and “Moral Hazard”
Common Property
The City
Child Care

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

Proposed Policies for Evaluation

Without reaching any final conclusion about any of the actual or proposed policies listed below, indicate for each of them one or two important considerations that this course has brought to your attention.

1. 1. Individual fire-detection units have been developed that emit a distinctive noise when fire occurs in a dwelling; they cost about $35. It is proposed that federal funds be offered to the states for refunding $20 per unit, for up to two such units, to any landlord or homeowner purchasing such equipment, in any state that, through its fire-safety authority or its regulation of the fire insurance industry, makes such detection devices mandatory or that severely penalizes the insurance rates of homes without them.
  2. Public provision to low-income persons with specific disabilities, and to the low-income very elderly, of “taxi vouchers,” useable in payment of metered taxi fares, redeemable in cash from the taxi company, in some standard amount calculated to cover some minimum number of trips per month for which such disabled and elderly people would need transportation by automobile.
  3. Cheap postal rates on books.
  4. Free eyeglasses for schoolchildren who need them, li parent’s or guardian’s income is below some specified level (as documented by income tax return).
  5. Free admission to selected Harvard football games for non-academic employees of the University.
  6. Requirement that any disability benefits generally available to company employees be provided also for some specified length of time for pregnancy and child-birth.
  7. The restriction, as presently in Cambridge, of most side street parking to local residents, enforced by parking fines for all vehicles without local-resident stickers,
  8. A provision that Harvard clerical, secretarial, and similar non-teaching staff be authorized, with the permission of their immediate supervisors, to enroll for grade and credit in one undergraduate Harvard course during each academic year, at no charge and with official time off from regular duties during class hours.
  9. Requirement that all new apartment buildings provide separate metering of heat in each individual apartment, with separate thermostat or other controls on heat use.
  10. Preferential hiring of veterans in government jobs.
  11. Federal program to finance welfare benefits so that benefits will be uniform among all 50 states.
  12. Free gymnasium-locker-shower and other athletic facilities made available to all employees of a large corporation, as a fringe benefit of likely value to employee health.
  13. On days when the weather makes it advisable to curtail sharply the volume of traffic on the Mass. Turnpike Extension (from the western suburbs to downtown Boston) put into effect, by radio announcement, the standby rule that cars will be admitted to the turnpike only if the first digit of the license plate is odd or even according as the date of the month is odd or even.
  14. Income-tax deduction or credit for home insulation expenditure.
  15. Life insurance equal to $50 thousand if single, $100 thousand if married, plus $25 thousand for each dependent child, for firemen and policemen killed in the line of duty.
  16. Unemployment compensation treated as “insurance” and not taxable as income.
  17. “Gasoline stamps” (patterned after food stamps) that low-income owners of registered cars and trucks can purchase at a discount, in limited quantities, as a cushion against the impact on low-income people of a federal gasoline tax.
  18. Mandatory deposit of 25¢ on every beer or soft-drink container purchased in Massachusetts, can or bottle, to be refunded upon return to any store where beer or soft drinks are sold, together with requirement that all containers sold in the state carry distinctive ineradicable markings to prevent wholesale turn-in of cans and bottles from outside the state.
  19. Mandatory $25 per year (for three years) increase in automobile insurance premium for every moving traffic for “safe” the proceeds used to reduce insurance rates drivers.
  20. The extra federal income-tax exemption for the blind.
  21. Federal income-tax deduction for contributions to schools.
  22. Rent control for persons over 65, for the disabled, and for certain other disadvantaged tenants.
  23. Exemption from minimum-wage law for youths under 17.
Swine Flu Vaccination

It is nearly forgotten now, but put youself back to January 1977: Forty million people had received swine flu vaccine. It was not clear whether an epidemic of swine flu might yet occur, and there was no final judgment on whether the vaccine itself entailed significant risk. Anywhere from 40 to 400 people were thought to have possibly died in consequence of the vaccine itself. It had been feared that a flu epidemic might ki11 40,000.

A characteristic of vaccination is that the more successful the program, the less protection anyone needs. If everyone is vaccinated, you don’t need to be. And if the epidemic is averted, vaccination deaths may outweigh flu deaths.

An important possibility in that January was that there remained a serious risk of swine flu but no sign of it yet, and that the publicity about some real or imagined fatal complications had made doctors afraid to offer the shots, patients reluctant to receive them, and health officials afraid to recommend them.

Suppose it were January 1977 and you were convinced that comprehensive vaccination could entail some hundreds of deaths from the vaccine, that it could reduce flu deaths by tens of thousands if an epidemic were otherwise going to occur, and that the chance of an epidemic was about one in five if vaccination were discontinued.

How would you evaluate the risks and benefits of stopping or proceeding with the program?

What suggestions could you make on ways to induce people to get themselves vaccinated?

55-Mile Speed Limit

The nationwide 55 mph speed limit that went into effect in 1974 was associated with a reduction in traffic fatalities for which no other explanation has been found. Suppose it becomes established that that speed limit, if enforced, will save three or four thousand lives per year with a commensurate reduction in injuries and automobile damage, but at some cost in truck and auto travel time and some cost of enforcement.

The deaths and injuries, to say nothing of automobile damage, are worth taking seriously. The costs of slower transport and the lost work or leisure time have to be taken seriously. But I do not know whether the costs and benefits of enforcing the speed limit make the speed limit a good bargain in lives saved, a disproportionate nuisance for a minor reduction in mortality, or a toss-up.

1. 1. How would you help me reach a decision?
  2. Indicate the numerical information you would want to gather and how you would use it in estimating benefits and costs.

Worth of Saving Lives

Consider a costly program that is expected to reduce the likelihood of death within some identifiable segment of the population, and thus reduce statistically the number of deaths within that part of the population. In addressing the question of what it is worth to save those lives, i.e. to reduce those deaths, via that program, an important question is, Worth to whom? Who cares, and how much?

Outline the way you would go about identifying the relevant interested or affected parties–individuals or governments–and how you might investigate the extent of their interest, especially the money value of their interest.

Crime Rates and Police Coverage

It has been observed that in some cities the incidence of armed robbery and illegal violence is kept at a low level by an effective response of the police, who, having a low level of violence to contend with, provide a deterrent likelihood of quick arrival. In other cities of similar social and geographic character the incidence of violence is so high that the police cannot answer calls promptly or investigate each incident. There is often no convincing explanation for the much greater prevalence of violent crime in the one case compared with the other-except, of course, the difference in effectiveness of police coverage. Yet examination shows that the numbers of police do not differ widely in the two situations.

On the analogy of the “tipping” model, develop an analysis that could explain this phenomenon.

Fire Protection

Fire protection is nearly everywhere a city-government or town-government responsibility in the United States. It is (a) financed out of taxes and (b) provided by town employees using town equipment. By contrast, fire insurance is a private activity, homeowners buying it from private companies. Evidently there is a belief that the market cannot meet the need for fire protection: either people won’t subscribe or private firms won’t offer it. Or maybe there is just a custom that nobody questions.

1. 1. What are some plausible reasons why fire protection might not be left to “the market”?
  2. Do you think some of these reasons are decisive, and fire protection needs to be organized as it is?
  3. Can you think of any alternative approaches to fire protection that might be worth experimenting with?

Smoking in Class

In “The Economic Common Sense of Pollution” Ruff discusses the idea of charging people for their polluting activity, rather than simply prohibiting or permitting it. A familiar form of pollution is smoking in enclosed places where non-smokers are present.

Suppose a special section of some class meets regularly in the evening. Some members of the class want to smoke; others complain of poor ventilation and object to any smoking. Somebody proposes that smokers might pay for the privilege of smoking.

It is known that you have given some thought to the “pricing” of pollution, and you are asked whether it makes sense to charge for smoking and, if so, how to determine how much to charge and what to do with the proceeds.

Discuss it.

Saturday Sections

A course instructor generously offered to meet Saturday morning with interested members of the class to go over the week’s material, answer questions, etc.. Attendance was meager for a few weeks but picked up as the semester wore on, and by late in the term most of the class was showing up Saturday morning. The following year, the instructor made the same arrangement; attendance was meager for a few weeks and then fell off until only a few loyal participants were left. Even they were gone by the end of the semester.

The instructor is perplexed at how one class was so eager while the other lost even the little interest it had. He is looking over the enrollments for the two years to see whether he can distinguish anything about the composition of the classes that would explain the difference. He wonders what to expect if he tried it once more. He’ll be happy for any advice you can give him.

Apartment House Heating

It is expected that many apartment buildings, especially among the lower-rent apartments, may again be unable to obtain as much heating fuel this winter as in past years, It is characteristic of apartments, especially the cheaper ones, that there is no metering of the heat consumed by individual tenants. If nobody takes steps to reduce heat consumption the building may run out of fuel for several days at a time, with frozen pipes and frozen people. If somebody takes steps to reduce the heat absorbed by his own apartment, usually nobody will notice–not his neighbors, not the landlord.

Nobody has a good idea of how much reduction in heat consumption by individual apartments will be needed, as measured by anything the tenant can measure–e.g., room temperature, radiator temperature, etc. Some apartments require more heat than others to maintain the same temperature. (Corner apartments require more heat.) Some families have elderly people, babies, sick people. Some apartments are vacant most of the day, some are occupied all day.

Nothing in any tenant’s lease makes any provision for heat control, rationing, rebates or extra charges.

You are asked by some concerned tenants to help work out a reasonable way to minimize the risk of acute discomfort and danger due to exhaustion of fuel.

Analyze the problem. State what data you would need in order to proceed. Outline at least one solution you would pro-pose, or several alternatives. And indicate how you might persuade tenants and landlord to accept your proposal in the event they fail to appreciate its merits or exaggerate its defects.

Deposit on Cans and Bottles

Legislation has been introduced to require a deposit on every beer or soft drink can or bottle, the deposit returnable upon return of the container. There are interests in favor and interests opposed. There is rarely discussion of how large the deposit should be–five or ten cents seems to be what people expect. The stated purposes are primarily to reduce littering and secondarily to conserve materials and energy by re-using containers or recycling materials.

What would you want to take into account–and what facts would you want to investigate–if it were up to you to choose and justify the amount (or amounts, if variable) that the deposit should be, if there were to be a deposit.

Smoking in Class: Another Room

Consider a classroom of students among whom some like to smoke, some find it disagreeable, and some don’t care. There is dispute whether smoking should be prohibited. (It has traditionally been permitted but complaints have been frequent.) An alternative room is available, one with an air conditioning system that will mitigate the smoke nuisance for both smokers and non-smokers.

The air-conditioned room costs extra, and the extra cost will have to be borne by the students.

1. 1. How would you determine whether the air-conditioned room is worth the cost? Be explicit about your criterion of “worth.”
  2. How would you propose the extra cost be paid–by which students and in what proportions?

Library Air Conditioning

A group of citizens has tried to get the town to spend $20,000 to air condition the library. They argue that the building is hot and stuffy in summer and the utilization of the library and the quality of the experience are diminished. For two years the proposal has gone before the town’s governing body, and both times it has been defeated. The opposition argues that the tax rate is out of hand anyway and this is a frill that will benefit a few at the expense of everyone.

The question will arise next year and the town leaders want to put this issue to rest. They have no axe to grind, just want the question settled. You have been requested to prepare an analysis and a recommendation.

1. 1. How would you frame the issue for analysis?
  2. What data would you want to evaluate different choices?
  3. Are there sources of money other than town-wide tax support that you would consider?

State-University Tuition

Radio station WBZ editorially has opposed the principle that a state university ought to charge residents a tuition of only one-fifth the usual tuition at comparable private universities, arguing that student loans and occasional scholarships coupled with regular tuition payments would be more justifiable.

A recent court decision called into question the right of state universities to charge higher tuitions to nonresidents than to residents of the state.

Evaluate the idea of low tuition for state residents at state universities, with attention to the following questions:

1. 1. Why should tuition be low compared with other universities?
  2. Why should tuition be subsidized only at the state university and not at any university in the state?
  3. Why should tuition be low only for residents of the state?
  4. Why should tuition not be similarly subsidized for state residents who get their education at colleges outside the state?

Be sure to discuss who benefits and who loses, what the effect may be on college attendance, and what the effect may be on attendance at the state university.

Nursery Schools

Some of the most expensive private schools, from nursery schools to colleges, provide scholarships for a few children whose parents could not afford the tuition. The system is challenged as inappropriate charity by some tuition-paying parents, and defended by others as a way of sharing privileges that only a few can otherwise afford. Nursery schools are usually not endowed, so the costs of scholarships are borne by the parents who pay tuition for their own children.

If you were asked to speak on this issue at a meeting of nursery school parents, on grounds that you have taken this course, what are the main points you would make to help the parents think about the issue?

Youth Fare

The Civil Aeronautics Board gave notice that “youth fare” had to be terminated. (Youth fare was lower fares for young people, usually with some loss of priority to the youths taking advantage of it.) The argument was that youth fare discriminates against other passengers.

Discuss the “discriminatory pricing” represented by the youth fare, indicating who is likely to gain and who to lose, with what effect on average fare, volume of travel, passenger convenience, and so forth.

Identify any significant distributional implications of the particular groups or classes that appear to gain and to lose.

What do you consider to be the chief socio-economic or other characteristic of “youth” that one ought to have in mind in considering the merits of youth fare?

Welfare and Work Incentives

If a welfare program assures every eligible family a specified minimum income, providing the difference between actual earnings and that minimum, the incentive and the opportunity to work gainfully are said to be impaired by a “100 percent income tax.” But without some assured minimum many families will fall below any decent standard of living.

1. 1. Explain the basic dilemma.
  2. Discuss proposed solutions.
  3. Evaluate the difficulty of finding an ideal solution to the problem.

Dining Hall Problem
1. Evaluate these alternative ways to distribute food and to assess costs in a graduate school dining hall.
  1. At every mealtime there is a fixed menu. Everybody gets the same meal and the same quantities. Total cost is divided equally among all those eligible to use the dining hall.
  2. As in No. 1 there is a fixed menu, but everybody eats as much as he pleases. The total amount of food is the same as in No. 1; and if some take more than their share and none take less, the last to arrive will face shortages. The cost is assessed in equal shares.
  3. Substantial variety is offered; everybody helps himself to whatever he likes, as much as he likes; adequate supplies are made available. Everybody is assessed an equal share of the total cost.
  4. A cheap meal is offered free; a variety of more expensive meals can be purchased a la carte. The cost, less the proceeds, is divided among the members.
  5. Same as No. 1, but the menu is fixed for each day of the week and known to all. People are charged only for the meals they eat, and may eat elsewhere. All meals count the same in everybody’s monthly bill.
2. What difference will it make—
  1. if individual dishes (and beverages, rolls, etc.) are in such form that they can be shared, given away, or traded among diners;
  2. if every member is issued a specified number of transferable guest passes each month;
  3. if every member has a pass, good for each mealtime, and anyone holding the pass will be admitted without further identification.

University Parking

A university possesses some parking area and finds that the number of employees who need parking has grown to twice the number of spaces available. Alternative public parking off campus is expensive. Numerous proposals have been made about what to do:

1. 1. Assign non-transferable parking stickers to half the employees. Do this (a) by seniority, (b) by lottery, or (c) any other selection system you propose.
  2. Same as a but let the stickers be sold, traded, or given away by the recipients.
  3. Assign spaces to those who live farthest away where there is no public transportation.
  4. Convert university parking space into public parking lots, charging admission to the general public like any other commercial parking lot.
  5. Give all employees who drive to work one ticket and “sell” parking to university employees at a “price” of two tickets per space, letting everybody choose whether to sell his ticket to another employee or to buy somebody’s ticket and acquire a parking space.

Make a recommendation and support it with the best argument you can construct. You need not recommend one of the above alternatives, but you must indicate why the scheme you recommend is superior.

Vouchers, Goods- (services) -in-Kind, or Cash

What are the central issues raised by the choice between giving people (1) such things as food stamps, school vouchers, trash collection vouchers, as against giving them (2) goods in kind, e.g., free lunches, or free schooling, or free trash collection, as against giving them (3) cash. Discuss the principles that should govern the choice, and illustrate your answer by three examples that highlight significant differences. (If you like, use food, schooling, and trash collection. If not, use any three that help you make your points.)

Gasoline Mileage

A major reason for U.S. dependence on foreign oil is that American automobiles get poor gas mileage. Three alternative remedies might be:

1. 1. Prohibit production of cars that get less than some specified miles per gallon;
  2. Put a tax on new cars that is related to gas consumption, high on cars with poor mileage while fuel-efficient cars pay a small tax or no tax or even receive a rebate;
  3. Tax gasoline, not automobiles.

Evaluate the three proposals in terms of what you have learned in this course.

Elasticity of Response

Some policies are motivated by an interest in changing the way people behave; others are intended to compensate people for the results of the marketplace or for extraordinary misfortune. Few policy measures are without some induced change in behavior, whether the change is intended or not.

Discuss the “elasticity of response” as a factor in policy evaluation. By “elasticity of response” is meant the degree to which behavior is affected by the policy.

Discuss the kinds of policies for which a high elasticity will frustrate the policy or make it too expensive, and the kinds that in contrast are justified by a high elasticity.

Give examples of both kinds. Your examples may be from income taxation, medical insurance, welfare programs, resource conservation, pollution abatement, or any field that interests you.

Property-Tax Exemption for Veterans

Many states provide benefits to veterans–mortgage guarantees for purchase of homes, civil-service preferences, certain kinds of tax exemption.

One proposal is that, as a benefit pertinent to young veterans raising families, every veteran should receive some stipulated exemption from property taxes within the state, possibly a specified amount or percentage to be subtracted from the assessed valuation on his property before the tax rate is applied.

(The mechanisms for this may be complex, since states might have to reimburse towns, which impose most of the property taxes, but suppose that the internal finances can be worked out.)

Evaluate the proposal.

Identify the purposes it may serve.

Identify any important distinctions and details that would make a major difference in the proposal.

Assuming that some state resources were to be made available for returning veterans, identify one or two alternative proposals that, at about the same aggregate cost, might come closer to meeting the criteria by which you judge such a program.

Incentive Effects of Private Insurance

An important principle in the analysis of social insurance programs is that incentive effects, many of which will be perverse but some may be beneficial, should be watched out for. Briefly discuss the incentive effects you might want to watch out for–and how you would evaluate them–in any policy designed to encourage, to discourage, or to rely on, the following kinds of private insurance that might be available in the market.

Assume that in each case the insurance pays compensation in cash.

Give some thought to who does the insuring–e.g., the customer’s own heating-oil company in (c).

1. 1. Insurance against loss due to burglary.
  2. Insurance against being convicted of burglary.
  3. Insurance against running out of heating fuel.
  4. Insurance against receiving a grade lower than some specified grade in a graduate course.
  5. Insurance against running out of gasoline during a gasoline shortage (for any reason).
  6. Insurance against losing money in the resale of a house in a “declining neighborhood.”
  7. Insurance against auto collision during hazardous driving conditions.
  8. Insurance against the cost of emergency help in the event of dead batteries, flat tires, or being trapped by snow in one’s driveway.
  9. Insurance against all medical costs incurred during a hospital stay.

Overbooked Airline

An airline oversubscribes a flight and by scheduled flight time has 140 passengers with valid reservations and only 120 seats on the plane, which will depart two hours late because of late arrival, so there are nearly two hours in which to decide what to do. There are no established rules to cover the situation. The airline has no record of the dates on which people made their reservations. The passengers have been informed of the situation but not told what the airline proposes to do. You are to advise the airline right now.

Pick one among the following procedures, or make up a procedure of your own that is not on this list, and defend it by comparing it with what you think are the most serious or attractive alternative procedures listed.

1. 1. Issue boarding passes randomly by drawing names out of a hat, making clear to the passengers that the names have been shuffled to guarantee randomness.
  2. Announce that the flight will be delayed until 20 people have either cancelled their reservations or made other arrangements, boarding the 120 still remaining.
  3. Have everyone hand sealed bids for places on the plane. The highest 120 bids are selected and the money collected. The amount collected is distributed among some or all of the 140 passengers in any manner you choose–equal shares to everyone, equally to those who did not bid high enough to get on, or whatever seems appropriate to you.
  4. Announce that spaces will be allotted according to the dates when reservations were made, the earliest 120 reservations to be given seats on this flight, and call out 120 names as though the airline actually had those dates available.
  5. Simultaneously raise the price of going tonight and lower the price for going tomorrow until you find a pair of prices at which:
    1. exactly 120 wish to go tonight, and
    2. the airline breaks even, that is the discount to the 20 who go tomorrow equals, in total, the surcharge on the 120 who go tonight.
  6. Issue 120 boarding passes by random selection—making clear the passengers understand that the names have been shuffled and the selection is random–but announce that the boarding passes are transferable, passengers may transact any business they wish with their boarding passes–e.g., a couple travelling together that obtains only one pass may attempt to buy a second pass or to sell the one they have and go together later.

Additionally, answer the following:

1. 1. Which among these procedures would be more acceptable if everybody knew in advance what the standard procedure would be in this situation?
  2. Which among these procedures would be less attractive if everybody knew in advance what the procedure would be.
  3. Which procedures are most likely, if they are the acknowledged general rule for these situations, to induce the airline to book the right number of people for each flight? (By the way, what is the right number for each flight that the airline ought to book?)

Environment in the USA and the USSR

In his chapter on Environmental Disruption, Marshall Goldman compares environmental destruction in the Soviet Union with that in the United States, finding not only that there is such a problem in both countries but that the specific occurrences look much alike. It is often supposed that in the United States businesses will disregard the environmental damage which they do because they are in pursuit of profit; it is often supposed that no such motives would obtain in a socialist economy. It may come as a surprise that in an economic system without the profit motive there is similar disregard for the environment.

How does Goldman explain the parallelism in the way the environment fares at the hands of these two dissimilar social and economic systems? How persuasive do you find his analysis?

Insurance and “Moral Hazard”

It is often argued that insurance may be self-defeating because of “moral hazard,” the tendency for people, once insured against some risk, to skimp precautions against the risk. People whose homes are insured against fire take fewer precautions against fire than if they had no insurance; people insured against theft may decorate their homes with more valuable objects than if they were uninsured.

For the contrary it is also argued that insurance frees people from the necessity to go to expensive lengths to guard against fire or theft, and that what is sometimes derrogated as “moral hazard’ is merely the efficient substitution of insurance for the more expensive alternative, protection. Better to pay $1 per $1,000 of home value per year to cover the cost of a house or two destroyed by fire than to spend $3 per $1,000 of value in protection, especially when the protection is imperfect.

Evidently these two views of insurance conflict. Presumably they conflict whether the insurance is privately purchased on the market or publicly provided by government. If you were asked which of the two views is the correct one, or are both views in the wrong, what answer would you give?

Common Property

In his article on a “Common-Property Resource: The Fishery,” Scott Gordon (in the book edited by Dorfman and Dorfman) likens the problem of the fishery to that of hunting and trapping, the drilling for petroleum from a common underground pool, and the use of common pasture for private animals in the medieval “common.”

State succinctly the nature of the general problem of common-property resources of the kind he investigates.

Give an example or two of your own.

Indicate some of the ways that these different variants of the same general problem may be solved.

The City

Wilbur Thompson, in the article contained in Hochman’s, The Urban Economy, refers to “The City as a Distorted Price System.

Can you explain what he means by this characterization?

Can you give a few examples?

What does he say (or imply) ought to be done about it?

Do you have an opinion on that?

Child Care

In her article on federal support for child care, in the Haveman and Margolis book, Alice Rivlin cites figures that “acceptable” day care for a pre-school or school-age child would cost around $2,000 per year. The figures were from 1968; with inflation it might be over $3,000 now. Among the arquments in favor of federal support for day care is the desirability of permitting comparatively poor mothers to work out of the house and augment their earnings.

Rivlin discusses the issue of extending federally financed day care to middle-income families (up to $12,000 per year at the time she wrote, equivalent to perhaps $16,000 now). If you do, she says, it’s expensive. If you don’t, you have the equivalent of a high “income tax” on poor women’s earnings.

Explain the dilemma.

Is it the same as the “welfare dilemma” discussed in connection with the negative-income tax?

How would the dilemma be affected if the women were given cash that they could spend on day care or on anything else they might prefer to spend it on?

Source: Thomas C. Schelling, Economic Principles and Public Policy (Harvard, Spring 1981). Exam Questions from Earlier Years. Photocopy reproduced in Economics Reading Lists, Course Outlines, Exams, Puzzles & Problems compiled by Edward Tower. Vol. 12 (July 1981): Public Finance Exams, Puzzles & Problems, pp. 18-38.

Image Source: File photo from 1983 Harvard News Office. The Weatherhead Center for International Affairs at Harvard University. “In Memoriam: Thomas C. Schelling, 1921–2016”

Tags Schelling

Economists Harvard

Harvard. Annual report on the department of economics. Dunlop, 1961-1962

Post author By Irwin Collier
Post date 2025-05-26

An overview of the annual comings and goings of a department are typically chronicled in a report prepared by the department chair. Such low circulation documents are sometimes targeted to a specific readership, e.g. a visiting committee, a dean, the alumni, but the report transcribed in this post for the Harvard economics department in 1961-62 does not appear to have had a particular audience in mind.

___________________________

About Chairman John T. Dunlop
(Harvard Album, 1960)

Sallying forth from an office in the farther reaches of Littauer to Washington, D.C., JOHN THOMAS DUNLOP, Professor of Economics and faculty member in the Graduate School of Public Administration, is certainly one of the university’s most travelled professors. Dunlop, a labor expert, teaches an undergraduate course on unionism and public policy applying to labor relations and problems; in the grad school he conducts two seminars, in one of which he had worked closely with the late Professor Slichter. But in addition to his teaching, Professor Dunlop is one of the country’s leading strike arbitrators, and he figures that he travels in the vicinity of 150,000 miles a year on this outside work. The occasion for a weekly trip to the nation’s capital is his post as the impartial chairman of a joint committee in the construction industry, comprising representatives of the eighteen major unions and contracting firms. In this position Professor Dunlop must mediate disputes between the union and management. He is also a permanent umpire for the women’s garment industry and in the past has served in similar capacities for the brass companies of Connecticut and the bituminous coal producers. The dispute in 1955 involving the complexities of the ratio of required conductors to the length of a freight train called him back to the role of mediator, following a long term with the Atomic Energy Labor panel. At present he edits the Wertheim series on the histories of various big corporations and unions, and he also administers a Ford Foundation grant to study the functionings of labor and management in the underdeveloped countries of Asia.

Professor Dunlop was born in the Forty-Niner gold region and graduated from the University of California in 1935. He has been with Harvard since 1938, when he joined the faculty as an instructor. He gets back to California at least once a year, and the last time he returned he did so by travelling eastward via Indonesia. Professor Dunlop lives in Belmont, and, when not compiling mileage, he devotes his time to his wife and three children, and concentrates on his tennis game.

Source: The Harvard Album, 1960, p. 29.

___________________________

Previously posted departmental reports

Department Reports to the Dean (1932-41)
Department Reports to the Dean (1942-1946)
Department Reports to the Dean (1947-1950)
Department Report to the Dean (1955-56)
Department Newsletter (June 1960)

___________________________

June 26, 1962

Report
Department of Economics, 1961-1962

1. Staff

Professor Gerschenkron was Taussig Research Professor for the year, and Professor Albert J. Meyer, lecturer in the Department, was also on leave. Professor Galbraith and Kaysen continued on leave in government appointments. During the spring term Professor Harris was on sabbatical leave; Professor Bergson held a Ford Faculty Research Fellowship, and Professor Leontief was Visiting Professor at the College du France, Paris. Assistant Professors Gill and Vanek were also on leave throughout the year.

As a consequence of the number of senior members on leave, the Department included this year a relatively large number of visiting professors and lecturers. Professor Jesse Markham of Princeton University taught the courses in industrial organization; Dr. Frank Spooner was in charge of economic history; Professor William H. Nicholls of Vanderbilt instructed in agriculture and economic development. Professor Jacob Viner was Taussig Research Professor, and while he taught no courses, we were delighted to have him with us for the year. Professor Schmookler of Minnesota was associated with the science and public policy seminar of the Littauer School, and was a visiting lecturer in the Department. In addition, Professor Domar of M.I.T. taught a course in the Soviet economy in the spring term. Mr. Langley gave courses ordinarily taught by Professor A.J. Meyer, and Professor Caleb Smith of Brown University continued to teach the accounting course.

2. New Appointments

The Executive Committee unanimously recommended the appointment of Professor Richard Caves as a permanent addition to the Department. Following the established procedures, the governing boards on May 14, 1962 voted his appointment as Professor of Economics effective July 1, 1962. Professor Caves completed his Ph.D. degree in the Department in 1958 and has been on the staff at the University of California (Berkeley) since 1957. He has been vice-chairman of the Berkeley Department. The appointment of Professor Caves will materially strengthen the Harvard Department, particularly in the fields of international trade and industrial organization. Moreover, he is regarded as an excellent undergraduate teacher.

The Department unanimously recommended and the President and governing boards approved the appointment of four new assistant professors starting July 1, 1962: Clopper Almon, Jr., Elliot Berg, Phoebus Dhrymes, and Thomas Wilson. It is planned that these assistant professors in the Department will devote part time to research and be paid in part from research budgets. Such arrangements, combined with the higher salary scales starting July 1, 1962, should facilitate the recruitment of first rate assistant professors; it has often been difficult in the past to fill this rank in this Department.

In approving these four appointments on March 5, 1962, President Pusey stated:

“It is my understanding that these four new Assistant Professors will devote part of their five-year tenure to special research projects and that an appropriate fraction of their salaries during these periods will be charged against the project budgets. I approve in principle the idea of experimenting in this way with charging portions of the salaries of assistant professors to grants or contracts, provided these grants or contracts are of sufficient duration to avoid the danger of funds running out when there are still large salary commitments in excess of our normal academic salary budget. Thus I feel that we should move with caution in this direction, treating the above appointments as experimental, and waiting for the results to become apparent before venturing further along this road.”

3. Chair in Modern China Studies and Economics

The primary responsibility for filling this chair has now been placed in the Department of Economics. After a series of conferences with the East Asia Research Center of Harvard University, President Pusey approved the arrangements under which the Department will seek a permanent appointment competent in Economics and with a command of the Chinese language. In the meanwhile, the Department is to be responsible for providing some instruction on term appointments in the field and is to have the use of the income of the endowment for such instruction and to develop promising scholars in this field.

Professor Kuznets is to be Chairman of the Committee of the Department to seek appropriate appointments. It is expected that Mr. Dwight Perkins, a graduate student in the Department, will provide a half course of instruction on the Economy of China in the spring term, 1963.

4. Undergraduate Program

The enrollment in the undergraduate courses in the Department has grown in the last several years. The aggregate enrollment in undergraduate courses was 926 in the fall of 1959 and 1375 in the fall of 1961; the aggregate enrollment was 1080 in the spring term of 1960 and 1281 in the spring of 1962. These figures include the enrollment in Economics 1 which averaged 540 in 1959 and 628 in 1962. It is thought that these increases in part reflect the reorganization of the undergraduate program placed into effect in the fall of 1960 following several years of work on the part of the committee on undergraduate instruction. The division of full year courses into half year courses, the arrangement of courses into four groups according to prerequisites and level of difficulty, the lectures in Economics 1 and the addition to the curriculum of a few new courses is thought to have stimulated enrollment.

Despite the increases in enrollment in undergraduate courses, the Department faces a serious continuing problem to maintain and to increase the number of concentrators in the field. The percentage of all concentrators who elect the field of Economics has declined from 7.7 percent in 1956-57 to 6.0 percent in 1960-61. The low concentration in Economics at Radcliffe is of particular concern to the Department, and conferences seeking to increase interest among the students have been held with President Bunting and other members of the Radcliffe staff.

In order to improve the quality of our instruction, Economics 98 (junior tutorial) is to be reorganized. The adoption of the Gill plan by the Faculty materially increased the number of students in Economics 98 from 40 or 50 to more than 80. The instruction in economic theory by lectures has proven to be inappropriate with the larger group. Next year, 1962-63, it is planned to divide the group into three or four seminars, each of approximately 20 students; each seminar is to be under the direction of a senior member of the Department or an assistant professor. In addition, tutorial groups of four or five students will meet with individual tutors. Professor Caves has been given overall responsibility for this important part of the undergraduate program.

5. Graduate Instruction

There was a total of 48 first year graduate students in the Department this year including 5 women and 3 enrolled through Littauer. There were 88 continuing graduate students including 6 women, 6 from Littauer, and 2 in joint degrees, for a total of 136 graduate students; in addition, the Department had 10 special students and 10 special auditors. A total of 21 Ph.D. degrees were awarded to students in the Department of Economics.

The competition for places in the graduate schools for work in the Department of Economics has grown more severe in recent years. From the more than 260 applications for admission to the Graduate School of Arts and Sciences received in the spring of 1962, there will only be about 45 new graduate students in the fall of 1962. Almost half of these students will be from outside the United States and Canada. For the fall of 1962 we have been able to obtain the admission of 8 out of the first 10 on our list, a considerably higher fraction than in recent years.

The Department faces strong conflicting pressures in making decisions on the number of new graduate students to be admitted. On the one hand, the Department is anxious to provide individual instruction particularly after the first year of graduate study for the highest quality students. A greater enrollment would also complicate materially the teaching of the required graduate courses in economic history, statistics and theory, and after a point would require further manpower so that two senior members of the Department might give parallel courses or sections. On the other hand, the Department is anxious to make its contribution to the increased demands for economists particularly for developing countries. Moreover the quality of a number of the students rejected for admission (perhaps as many as 15 to 20) appears to be very good. In the selection of students from abroad it is particularly difficult to know whether one has made the best selections. When students are admitted whose records turn out to be poor, there are often many complications for both the student and the University. The Department has spent considerable energy in reviewing the records of students admitted during the past decade; a careful statistical study was made under the direction of Professor Houthakker. The Department is continuing to seek to improve admission procedures.

Financial resources available to the Department for its own use for scholarships and fellowships is a serious problem since the money made available by the generous gift of Mr. Roger Kyes has now been exhausted.

6. Organization of the Department

The Department now performs much of its routine business through committees. The two major committees are on Undergraduate Instruction under Professor Eckstein and on Graduate Instruction under Professor Dorfman.

7. Research

A very large amount of research activity is carried out by members of the Department of Economics. In addition to individual research by senior members, an increasing number of research projects which employ a number of graduate students and junior staff are being conducted under the direction of senior members. These research projects often provide opportunities for training of graduate students in research methods and afford topics and financing for Ph.D. dissertations.

Among these research projects with financial support are the following:

Professor Leontief	Harvard Economic Research Project which has recently been refinanced for a period of years.
Professor Mason	The relations of government and business in economic development.
Professor Mason and Dr. Papanek	Overseas operations and training (Center for International Affairs)
Professor Kuznets	Economic growth
Professor Eckstein	Economics of public expenditures
Professor Houthakker	Forecasting consumers’ expenditures
Professor Harris	Education and Public Policy
Professor Schelling	Defense studies and Experimental Study of Bargaining
Professor Dunlop	Labor-Management History and Economics of Medical Care
Professor Duesenberry	Capital Markets
Professor Meyer	Business Decisions
Professor Bergson	Soviet Economics
Professor Gerschenkron	Economic History Workshop

8. Public and Professional Activities

A number of members of the Department were engaged in a wide variety of professional activities and public service during the year. A few instances may be of interest; no attempt is made for a complete listing.

The president of the American Economic Association comes from this Department two years in a row. Professor Mason is president for 1962, and Professor Haberler is president-elect.

Professor Leontief was chairman of the International Conference on Input-Output Techniques held in Geneva, Switzerland in September 1961 and sponsored by the Harvard Economic Research Project in association with the U.S.[sic] Secretariat. He was also a member of the Commission of Experts for the United Nations which reported on the Social and Economic Consequences of Disarmament.

Professor Dorfman served as a member of the President’s Scientific Advisory Committee team on Waterlogging and Salinity in West Pakistan. He is also a member of the President’s Committee to Appraise Employment and Unemployment Statistics.

Professor Harris is serving as Economic Advisor to the Secretary of the Treasury and is a member of the Public Advisory Board of the Area Redevelopment Program.

Professor John R. Meyer served as a consultant in connection with the President’s message on Transportation Policy.

Professor Kuznets is Chairman of the Committee on the Economy of China of the Social Science Research Council.

Professor Bergson is a member of this same Committee and chairman of the Joint Committee of Slavic Studies of the Social Science Research Council and the American Council of Learned Societies. His study, The Real National Income of Soviet Russia Since 1928, was published in 1961 by the Harvard University Press.

Professor Mason is Chairman, Advisory Committee, A.I.D.

Professors Duesenberry, Eckstein and Smithies have been consultants to the Council of Economic Advisors. Professor Duesenberry was on the staff of the Commission on Money and Credit and was chairman of the Joint Economic Committee’s Inventory Study Committee.

Professor Schelling has been a consultant to the Department of Defense and to the Scientific Advisory Board of the Air Force. His study Strategy of Arms Control (with Morton J. Halperin), was published by the Twentieth Century Fund in 1961.

Professor Houthakker has worked on revenue forecasting problems for the Department of the Treasury.

Professor Dunlop was a member of the Presidential Railroad Commission (1960-1962), and is a member of the President’s Missile Sites Labor Commission. He was Chairman of the International Conference on Labor Productivity under the auspices of the International Economic Association held August-September 1961.

9. Visiting Committee

A series of meetings this year with the Chairman of the Visiting Committee, and others of its members, have improved the relations between the Visiting Committee and the Department of Economics. I believe these new attitudes are reflected in the annual report of the Committee. There is a genuine desire on the part of both the Department and the Committee for a constructive relationship.

___________________
John T. Dunlop
Chairman

Source: Duke University. Economists’ Papers Archive. David M. Rubenstein Rare Book & Manuscript Library. Edward H. Chamberlin Papers, Box 17, Folder “Economics Department 1960-62”.

Image Source: The Harvard Class Album 1960, p. 29.

Tags AlmonC, BergE, Bergson, Caves, Dhrymes, Domar, DorfmanR, Duesenberry, Dunlop, Eckstein, Galbraith, Gerschenkron, Gill, Haberler, Harris, Houthakker, Kaysen, Kuznets, Langley, Leontief, Markham, Mason, MeyerAJ, MeyerJ, Nicholls, Papanek, Perkins, Schelling, Schmookler, SmithCaleb, Smithies, SpoonerF, Vanek, Viner, WilsonT

Economist Market Economists Harvard

Harvard. Haberler pushes hiring Caves rather than Chenery or Arrow in 1961

Post author By Irwin Collier
Post date 2025-05-05

Economics in the Rear-view Mirror has already posted two artifacts revealing Gottfried Haberler’s unfiltered opinions of other economists that he put into writing.

re: John Kenneth Galbraith vs. Paul Samuelson
re: Samuel Bowles

In my reading of the memo transcribed below I get the sense that Haberler was not shy of overstating his case for the appointment of Richard Caves by diminishing Arrow’s virtues: “I cannot help feeling that some of his [Arrow’s] work is fanciful and esoteric in the extreme and its chance of survival is very low.”

Personal note: I once paid my Yale mentor William Fellner a courtesy call when he was a resident scholar at the American Enterprise Institute in Washington, D.C. in the 1970s. Fellner was a lunch-buddy of Gottfried Haberler and he invited me to join the two of them for lunch at the Mayflower Hotel. I confess (with a combination of understanding for myself and shame) that I hadn’t a clue who the frail old man wolfing down his lunch across the table from me was and he displayed no interest in conversation with me either. And now here I sit, posting a 63 year old Haberler memo for the historical record.

____________________

All three were eventually given
Harvard professorships anyway

Kenneth Arrow (1951 Ph.D. Columbia, Harvard appointment 1968)

Richard Caves (1958 Ph.D. Harvard, Harvard appointment 1962)

Hollis Chenery (1950 Ph.D. Harvard, Harvard appointment 1965)

____________________

Haberler’s Protest:
Preface to his Colleagues

To the Senior Members of the Department:

I am going to send the attached letter to the President unless anybody strongly objects. For the members of the Department I should like to add that I somewhat resent the surprise tactic used in bringing up the name of Arrow in yesterday’s discussion. Let me confess that this was not immediately clear to me — which on reflection causes me to deplore it all the more. I have reason to believe that others too were taken by surprise.

December 13, 1961

____________________

Haberler’s Protest in Full

CONFIDENTIAL.

MEMO TO: The President, the Senior members of the Department of Economics, the Dean of the Graduate School of Public Administration

FROM: Gottfried Haberler

In my opinion, the Department of Economics is making a serious mistake in filling up the Department too much with mathematical and econometric economists through the proposal to appoint Arrow and Chenery. May I say by way of introduction that, although I am not myself a mathematical economist, I have a high appreciation of the mathematical and econometric method and have consistently shown that by my votes in the Department.

I do believe, however, that at the present time the Department is well supplied with talent in this field. Five members of the permanent staff belong to that category — Dorfman, Houthakker, Leontief, Meyer, Schelling. True, all of them have developed strong interests in policy problems and have worked on applied problems. None of them is a “pure” theorist in the sense that he works exclusively in the theoretic-mathematical-econometric field, but all of them (with the exception of Schelling) have been appointed for their theoretical, mathematical, econometric skills.

In addition to the permanent members, there are always non-permanent members in that category, at present especially Clopper Almon [Obituary].

No two of these five men are quite alike and Arrow is different from all of them. As far as I know, Arrow has not yet developed an active interest in policy questions. I do not criticise him for that — it may well be an asset. All I want to say is that we are well supplied in his general field of competence. He certainly is a most competent man and he, rightly, has a high reputation in the profession. But I cannot help feeling that some of his work is fanciful and esoteric in the extreme and its chance of survival is very low. On earlier occasions when he was discussed in the Department, Professor Leontief expressed precisely the same doubts and reservations. Now he thinks that a large department, such as ours, should have men of that type even if — as he still readily concedes — the permanent value of his ideas is problematic. My point is that we are well supplied with this sort of talent and that we are tilting the balance of the Department too strongly in one particular direction.

The fact that we propose to the School of Public Administration the appointment of Chenery fortifies in my opinion the above criticism.

Chenery too is a mathematical-econometric economist of high quality and great energy. His special field is input-output analysis in its application to less developed countries. He is not, of course, a “pure” theorist. On the contrary, application of the theoretical-statistical tools is his strength, especially of input-output analysis. He has also developed administrative talents. At this time, he holds an important position in Washington which makes him look especially attractive to Littauer, I am not in a position to evaluate his suitability for his government assignment. But I should like to say this: I feel strongly that input-output is of no use for the less developed countries, because their basic statistics are woefully inadequate. This does not mean that Chenery will be a poor administrator. It is possible that for him, in his present position, input-output will be a mere ritual. I assume, however, that Littauer does not appoint him for his administrative capabilities, but rather for his scholarly talents, and these latter belong to the same general field — mathematical-econometric analysis — as Arrow’s and the five members of the Department whom I mentioned.

I feel all the more strongly that the Department is making a grave mistake, because we are passing up a rare opportunity to appoint another man who fits into our Department better than either of the two men mentioned and who has other talents which we urgently need, namely, Richard Caves.

The Department has unanimously voted to recommend the appointment of Caves if Arrow is not available. I therefore need not argue his high competence and standing in this profession. Let me only say this: Caves has shown that he not only understands and appreciates the modern mathematical, statistical and econometric methods of analysis, but also — which is a different thing — that he knows how to use them. He has shown himself at the same time to be a master of traditional economic theory and of modern quantitative analysis, a very rare combination indeed. In addition to that he has become a very effective and stimulating undergraduate teacher, which neither one of the other two men is. We are often criticised for neglecting undergraduate teaching. We have tried to remedy this situation, but the difficulty has always been to find a man who measures up to our standards of scholarship and is at the same time an effective undergraduate teacher. Here we have the very rare opportunity, the opportunity of a lifetime, to appoint a man who is both at the same time — an accomplished scholar who is thoroughly familiar with the history of his science and wields modern quantitative methods of analysis effectively, and is also an inspiring undergraduate teacher. It would be inexcusable to let that opportunity pass.

It should be added that Caves is younger than the other two and is being considered by two leading universities for a permanent position. If we do not get him now we will in all probability have lost him forever.

I should also like to say that I disagree with the view that Chenery is better suited for Littauer than Caves. True, being older he has more administrative experience. But this should not be decisive, in my opinion, except that from a superficial public relations standpoint it may look appropriate to appoint someone to Littauer who has held a high position in Washington. Both men are intensely interested in policy problems, but both will always feel that they are primarily economists and neither will want to lecture only on policy problems or only to Littauer students.

December 13, 1961

Source: Economists’ Papers Archive, David M. Rubenstein Rare Book & Manuscript Library, Duke University. Edward H. Chamberlin Papers, Box 17, Folder “Economics Department 1960-62”.

Image: Radcliffe Archives. Portrait of Gottfried Haberler. (1965).

Tags AlmonC, Arrow, Caves, Chenery, DorfmanR, Haberler, Houthakker, Leontief, MeyerJ, Schelling

Exam Questions Harvard Theory Uncategorized

Harvard. Graduate Economic Theory Exam. April 1963

Post author By Irwin Collier
Post date 2024-12-09

Edward Chamberlin was a member of the graduate examination committee of the Harvard economics department in the early 1960s and in his files I have found copies of the theory exams from 1961, 1962, and 1963 along with a few memos that circulated among members of the committee that together provide a description of the procedures used for grading.

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

_________________________________

Other Written Exams
in Economic Theory

April 11, 1961
November 13, 1962

_________________________________

HARVARD UNIVERSITY
Department of Economics

Written Economic Theory Examination
April 8, 1963

You are to answer a total of 6 questions.

All three questions in Part A.
One question each in Parts B, C, and D.

Use a separate book for each question.

PART A: Answer all THREE

Explain the phenomena of “external economies” and “external diseconomies.” Describe how they affect the efficiency of the competitive pricing mechanism, and discuss measures which have been proposed to improve welfare when external economies or diseconomies are present.
State and explain several leading principles from the field of “non-price competition.” Comment on the problems that arise in combining this type of theory with the more orthodox “price competition.”
Interpret the Marshallian concept of Consumers’ Surplus in terms of a theory of utility based solely on Indifference Lines.

PART B: Answer ONE of the two.

Contrast the “liquidity preference” and the “loanable-funds” theories of interest. Discuss the implications of these two theories for monetary policies intended to maintain full employment.
Discuss the purely theoretical proposition that if all prices everywhere were sufficiently responsive in both directions to supply and demand there would, in a free market economy, be no persistent unemployment. Be equally interested in pointing out what may be right and what may be wrong about the statement. State what assumptions you would want explicitly stated if you had to support the proposition.

PART C: Answer ONE of the two.

Compare the main ideas of Adam Smith and David Ricardo about economic growth — its mechanism and its consequences.
Formulate a simple, highly aggregated model of economic growth. Incorporate technological change in it by including an industry called Research with a production function of a specified shape. Its inputs are capital (stock) and labor (flow). It is up to you to give a definition of its output that is appropriate to your model.

PART D: Answer ONE of the two.

Explain and compare some of the conclusions that economists have reached about the interest rate in a static or stationary state.
Discuss the similarities and differences among the principles of economic choice that are applicable to the three following:
1. an individual consumer;
2. a trade union, producers’ cartel, or other interest group;
3. society as a whole.

You may keep this question sheet when you hand in your exam books.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling
Raymond Vernon

6 Divinity Avenue
Cambridge 38
Massachusetts

April 23, 1963

From: T. C. Schelling
To: Messrs. Chamberlin, Leontief, Vanek

I enclose a sheet with the names and grades for your information.

The outcome of our regrading was as follows. You will recall that there were five students for whom we were rereading one or more books. You will also recall that we were to count the third reading as equal in weight to the other two. The results were:

Book 3, down from 1.4 to 1.2, Fail
Book 5, down from 1.4 to 1.1, Fail
Book 6, up from 1.5 to 1.6, Fair
Book 7, up from 1.25 to 1.4, Fair –
Book 10, down from 1.5 to 1.0, Fail

To recapitulate, three of these failed, and we had five clean failures, making a total of eight failures. On the rereading, three Fair minuses went down to Fail, one Fail went up to Fair -, one Fair – went up to Fair. I think this is about what we could have expected, and I am glad we did the rereading. Incidentally, two of the three who failed after the rereading had three books reread with two different readers involved, so I think we can feel they got fair treatment.

Next week I shall circulate to you my thoughts about a report to the Department and, if you wish, we can get together or alternatively you can add your comments. If it is convenient I should prefer to get together, but not until I have given you at least my thoughts on what we should report.

TCS: ac

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling
Raymond Vernon

6 Divinity Avenue
Cambridge 38
Massachusetts

June 4, 1963

From: T. C. Schelling
To: Messrs. Chamberlin, Leontief, Vanek
Subject: Report to the Department on the Graduate Theory Examination

We promised the Department a report. And we had some things we wanted to report.

Some of our experiences we can communicate to next year’s committee over the lunch table. Some really require the Department’s cognizance. I am listing below some of the points I think we should like to report. This is not a draft, but just a chance to check with you. If you agree, disagree, or want to add anything, I suggest you do so in writing with copies to each other. There is no great hurry, but next year’s committee will want some Departmental instruction by the time of the second Department meeting next fall. I would like to get this done before my memory fades, and submit it if possible to the Department as soon as everybody is back from the summer.

I would propose that individual questions be graded not Excellent, Good, Fair, and Fail, but either numerically on the base one-hundred or with letter grades A, B, C, with the committee to decide — subject to any advice the Department wishes to make explicit — what kind of average or combination of grades should qualify a person as a “pass.” The Department should either make clear that the committee may do as it pleases or express itself on such things as how many failures on individual questions make a failing exam in spite of the average. The Department might also express itself on how large or how small the failing fraction might be without being considered “abnormal.” Just to get a proposal in the works, I would propose that questions be graded A, B, C, and Fail, with a B- required for passing, but with the committee empowered to make individual exceptions in either direction on the basis of the whole exam, and that the committee expect to fail somewhere from one-tenth to one-fourth without considering a “policy issue” being involved.
I would strongly recommend that we experiment next fall with typewritten examinations. This raises a number of technical questions, ranging from who provides the typewriter to how noisy the room is, and it surely discriminates somewhat according to typing skill. The present scheme also discriminates according to longhand skill. Students who cannot type, or choose not to type, should have their examinations transcribed, either at their own expense or at the Department’s expense. This seems to me the one exam that, because it is for graduates and because it interferes with no individual’s course, lends itself to the experiment. I feel quite sure that the reading of examinations will be much more reliable if the material is typed, and that disputed grades could be discussed more readily if the exams can be easily and quickly read. The number of students taking the exam in the fall is usually small, and that is therefore a good time to try it out.
I am surely persuaded that anonymous examination books make a real difference and the difference is a good one. I think the committee should avoid as far as possible putting students in special categories like the few who this year were offered the option of presenting to the oral exam with a re-examination in theory. At the same time, the committee cannot avoid having an opinion (or opinions) about the success of its own examinations; and the committee may, as I think we did, have some doubts after the examination about its reliability. If these are strong doubts, they should, as we did, consider special treatment of a few individual cases.
Especially if we go in for typed exams, the Department should consider making this a six-hour exam rather than a three-hour exam, just to increase its reliability. Reading time, I believe, would be sufficiently cut by having a typed examination to make the six-hour exam feasible for the committee.
The questions are also up to the committee but I would pass along the advice that the questions be as concrete and as problem-oriented as possible in contrast to general essay or discussions of what economists have said, proposed, etc. I think I say this not out of a priori prejudice but because I have felt more confident of the grade I gave when the student was responding to a very direct question or problem with little scope for inadvertent or deliberate evasion and with the obligation to give his own answer and not to repeat [what]others have [said]. This kind of advice surely is not suitable for Departmental action, but, if we share some experience we might try to articulate it for the next committee.

TCS: ac

_________________________________

Schelling’s Memo to Dunlop
and the Exam Committee

TO: CHAIRMAN [John Dunlop], DEPARTMENT OF ECONOMICS

FROM: THOMAS C. SCHELLING, CHAIRMAN

DEPARTMENTAL COMMITTEE ON THE GRADUATE THEORY EXAMINATION

RE: WRITTEN THEORY EXAMINATION

DATE: SEPTEMBER 18, 1963

Last year’s committee, consisting of Chamberlin, Leontief, Vanek, and me, reached several conclusions we would like to report for the benefit of the new committee that follows us. Most of the observations we want to pass along arose out of our dissatisfaction, not our contentment, with the examination process. We would like this report to go to the whole Department, or the Executive Committee, or whatever part of the Department is appropriate; if you want to postpone this a month while your new committee decides what it would like to do, if anything, about these recommendations, that is agreeable to us.

Our grading scheme, which we accepted without much thought, was to grade each question excellent, good, fair, or fail, with plus and minus, then to convert these to a numerical scale to facilitate averaging, and then to grade the whole examination. This procedure led to an anomaly that in turn produced some real misunderstanding among the graders. The anomaly was that, after collecting all of the books together and looking at the distribution of grades, the committee might wish to fail people whose average grade was “fair” or to give an “excellent” to a man whose average grade was “good.” This can lead to disputed interpretations of what the grades meant as well as what the grading standards should be. I doubt whether any committee would want, either in principle or in practice, to rely on a straight forward averaging to determine good, fair, fail, etc. I strongly recommend — and this may sound trivial but it is not — that the initial grading be on some arbitrary numerical scale with the final determination of over-all grades from fair to excellent being determined afterward. My committee agrees with this. I personally do not see that a matter of principle is involved here that ought to go to the Department, but I foresee that some eventual controversy may be forestalled if the Department is apprised of this problem and of the new committee’s intentions.
The committee is bound to have some notion of what proportion of those taking the examination might normally be expected to fail it. Different members of the committee may have very different notions. I believe this is meant to be a hard examination, and that the fraction failing it might be comparable to Written Theory Examination the fraction of students who fail their Generals. It is, I believe, also meant to weed out students who would likely fail their Generals. And it is an examination in which the committee ought to feel that anywhere from one-tenth to one-quarter of the candidates might be failed without the result seeming to be abnormal. It might be helpful if the Department would at least discuss the matter briefly so the committee would have a pretty good idea how much leeway it had in grading. It is not quite enough to say that this is completely within the committee’s competence; the philosophy of the examination derives somewhat from the Department’s notion of how strict this examination ought to be and how great a variation in outcomes needs to be expected.
We recommend that the committee experiment in the fall term with typewritten examinations. There are some practical questions here, such as who provides the typewriter, how noisy the room will be, and so forth. Typewritten exams will discriminate according to typing skill; but the present exam discriminates according to long-hand skill. Students who cannot type, or who choose not to type, should have their examinations transcribed, either at their expense or at the Department’s expense. Because this exam is for graduates, and because it interferes with no individual course, it lends itself to experiment; in particular, the small group in the fall term presents an opportunity on a small scale. All of us on the committee believe that the grading will be more reliable if the material is typed, and that disputed grades can be discussed better, and reread more easily, if they are typed. We, therefore, strongly urge that the experiment be made this year.
We are quite persuaded that anonymous examination books (books from which student names have been removed) make a real difference and that the difference is a good one. In case of borderline grades, it is hard to resist the temptation, after the exam has been graded, to get out the student’s record and see whether or not he deserves the benefit of the doubt. We did this, and we believed it was right to do so, but maybe as a matter of principle it should not be done. Let me point out that an awful lot hinges on a single examination if one does not fall back on the student’s theory record in borderline cases. In the oral examination I think it is fair to say that the student’s course background does count in the examiner’s evaluation of him. If the Department really does not want the written theory exam to be anything but an anonymous exam graded solely on its merits, a flat rule would relieve the committee of a philosophical problem that can be quite a nuisance. If the Department wishes the committee to use its own judgment, it will probably help the committee to have it understood in advance that the committee may decide this one. We recommend that the committee be free to use the additional information after the books have once been graded but that the committee avoid this expedient if possible.
If the typed examination is adopted, there is much to be said for making this a six-hour examination to increase its reliability. Reading time will be cut by the typing enough to compensate the greater number of books read.
Our final recommendation involves something that cannot be legislated. It is that the questions be as concrete and as problem-oriented as possible, in contrast to general essays or discussions of what economists have written about a subject. Our impression was that grading was much more reliable on the more direct questions and problems. There was both deliberate and inadvertent evasion on the more general questions, as well as more ambiguity on the committee itself as to what the question called for. The common occurrence of a bluebook that was a decent essay on a question that wasn’t asked might be averted by using questions that are fairly direct and unambiguous. Another common occurrence was the bluebook that indiscriminately gave the positions of various writers without the student’s accepting responsibility for his own analysis or evaluation. Our feeling was that these rather indirect questions provided quite unreliable evidence on which to grade students.

_________________________________

Chamberlin’s Memo
to the Exam Committee

This letter was “in the works” when Tom’s report to John Dunlop of September 18, 1963, came in the mail. It is now sent as a supplement to Tom’s report.

FROM: E. H. CHAMBERLIN
TO: MESSERS. SCHELLING, LEONTIEF, VANEK

SUBJECT: REPORT TO THE DEPARTMENT ON THE GRADUATE THEORY EXAMINATION (letter from Tom Schelling, June 4)

First I should admit that I was against the written theory examination when it was first proposed, but without any question the experience this year has made me more opposed than ever. In my letter to the other members of this committee on April twenty-fourth (?), I urged that the attempt to shake some more failures out of the group of eight between the figures of 1.2 and 1.5 had been a “fiasco” and that we should simply allow all of them (i.e., everyone excepting [name deleted], [name deleted], and [name deleted]) to take the orals, with the decision whether to pass or fail to be made at that time. As a compromise, we finally settled on three students: [name deleted], [name deleted], and [name deleted], and offered them the opportunity of taking the oral examination, in which they might do well enough to pass, even though they had “failed” theory. (The fact that no one of them accepted was certainly not surprising, since they had all been told already that they had failed theory and therefore had two strikes against them if they risked the orals.)

Although we all concurred in the decisions, I feel that I was mainly responsible for the matter coming up at all. As certainly evident in my letter of April twenty-fourth, I was extremely critical of the attempt to fail people who had already been graded at or near the good- to fair+ line merely because we “needed” more failures. In this respect especially I think the policy worked badly this year. The whole matter is probably one for the Executive Committee, rather than for this one. I hope it is understood that from many years of examining in economic theory I have the matter very much at heart. Certainly the treatment of our graduate students at the end of the second year is of the first importance, and I think the Executive Committee should devote some time to reconsidering the whole problem.

I still hope that this group may issue a unanimous report to the Department although as will be seen from the following comments there are son important differences between Tom and me. Perhaps we ought to have a meeting. Comments:

Questions of grading.
1. The approach of failing a certain percentage of those who take the exam (“one-tenth” to “one fourth”) must absolutely be dropped. It is contrary to the practice , both of this Department and of Harvard University, for as far back as I can remember. One only needs to recall the recent principle that “all (undergraduate) students are potential honors candidates” and to consider the grading processes with respect to these latter, to realise how far astray the concept of “failing or passing a certain percentage” is from the general practice at Harvard, and, in the past, in this Department. In any event, it is clearly unjustifiable with a group as small as we normally expect in the written theory examination — this year 37, of whom we failed, by a great effort, 8, or more than 20 per cent. I think it was the obsession that 3 was not enough failures and that we ought to increase the number, that led to a compounding of arbitrary decisions at the “margin”, and to results which, as I think I demonstrated in my earlier letter, made passing or failure for the group of 8 to which it was applied, almost a matter of pure chance. It was a witch’s brew if there ever was one. However, it was described in some detail in my earlier letter, and I refrain from another lengthy demonstration here.

Only one example from later developments: there were three books at the same grade of 1.25, (a Fair+ by the first reading). Two of them, having no questions eligible for re-reading by our rules, were below the new line of 1.4, and left as “failures”; a third, however, qualified for having two questions re-read (the intervals of discrepancy being 4 and 5 in the two cases), was converted into a pass and finished with a “Good” in the Generals. Why should he have had the opportunity to take Generals while two at the same grade had to wait six months? The conclusions: 1. I think we should admit that the methods we used to make distinctions within this “marginal” group were at fault (to put it mildly) and were future committees against them. 2. We should revert to an “absolute”, not a “relative”” or percentage, standard of quality for passing, and for the several grades of Excellent, Good and Fair, rather than trying to fail a particular number or percentage of people. 3. We should recommend to the Executive Committee that they reconsider whether we really want to “raise standards” in the Economic Theory part of the General examination as much as we appear to have done.

As for the second point, my own conviction is that only those conspicuously deficient in Theory should be failed. It should be not only possible, but a goal of the Department that all who take the examination should be well enough prepared to pass. After all, this only means that the Admissions Committee has done its work well, that the student has been well-advised as to courses, and that he has not outrageously neglected his work. Realistically, of course, there will usually be a few failures, either in the Theory exam or in the Generals. But in my opinion, failures should be voted by the Executive Committee upon recommendation of the Committee on the examination. In all cases of recommended failures, the members of this latter committee should each read the entire book with full knowledge of the identity of the persons involved and decide upon the fate of the student only in consultation, (as at present after the general oral examination).

1. As for grading terminology, this year it was Excellent, Good, Fair, and Fail, as we all know, and when numerical values were given to these categories later, the space between then was assumed to be equal: 6, 3, 0 (=Fair!) and -3. Tom has made another proposal in his letter (of June fourth). The important thing, it seems to me, is to put more space between Fair, which has always been a passing grade, and Failure. Indeed, one could easily explain the fact that 23 out of 37 books, approximately two-thirds, received a good- (2) in the first reading by the fact that 2 is mid-point between 6 and -3! Although these (good-) books were later broken down and distributed between the levels of “good” and “fair-”, this merely disguises the fact that the grades given actually had very little difference between them. In fact, with the exception of only four books, 33 of the 37 lay between the limits of 2.8 and 1.2, the former .2 below the good average, and the latter .2 above the fair+ average. Clearly the method of grading used this year, in spite of later adjustments, did a poor job of revealing the differences which must exist among the candidates who took the examination.

However, using the same figures, I experimented with breaking up the concentration at good- by introducing mechanically several considerations which ought to enter in anyway. Since this was actually done (out of the sheer fascination of the problem) I attach copies of the result for what they may be worth, perhaps only in suggesting the other ways in which the objective might be achieved. The 6, 3, 0, were kept for Excellent, Good, and Fair, but Fail became -9 (i.e., -6 more in every case of a -3). A more normal scale would evidently be: six questions with a value of 15 each; highest possible total grade a 90. Each question graded 15 = Excellent, 12 = Good, 9 = Fair, 0 a total failure. Also +3 whenever two different readers agreedthat an answer was a Good or better, and -3 whenever two readers both gave 0 (=Fair) or less. These several devices spread out the grades, [name deleted] actually got his Excellent, [name deleted] and [name deleted] showed up as clear failures instead of getting fairs, with [name deleted] such a low Fair that he might easily be added in, the number of Good’s was reduced to 15, etc., etc. (The applause is accepted). No re-readings, either.

To return to Tom’s letter:

I do not think it is fair to require students to type-write their examinations or pay to have it done (I think it is optional now). But they should be warned to write legibly and told that if they do not, they will have to pay to have their written examinations transcribed.
I agree that anonymous examination books are desirable up to a point. But no one should ever be failed without knowing the candidate’s identity and all we can about him.
A three hour examination seems to me long enough, or four at the very most. We should not forget that each student has already been examined for three hours per semester in his courses.
I think the questions should be of all kinds. Just as I refuse assent to the proposition that the scope of Economic theory should be limited to what can be treated in mathematical symbols, as I should not want an examination in theory to be cast in one particular mold.

_________________________________

Leontief Letter to Schelling

September 23, 1963

TO: T. C. Schelling

FROM: W. Leontief.

cc: B. H. Chamberlin, J. Vanek

I heartily approve of all recommendations contained in your memorandum on Written Theory Examinations dated September 18th.

The typing of all examinations — which, incidentally, I proposed at the very beginning before we started them — might not be easy to arrange since the secretaries in the Department offices have no less difficulty in reading the handwritten bluebooks than we do.

A six-hour examination might be rather hard on the students unless it is made quite clear that the additional two hours are allotted for preparing a clear typescript or readable long-hand.

WL: kd

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Written Theory Committee, 1963-64”.

Tags Chamberlin, Dunlop, Leontief, Schelling, Vanek

Exam Questions Harvard Theory

Harvard. Graduate Economic Theory Exam. November 1962

Post author By Irwin Collier
Post date 2024-12-09

Of related interest is the following report that was transcribed and posted earlier:

Report on the General Examination for an Economics PhD, 1970

_________________________________

Other Written Exams
in Economic Theory

April 11, 1961
April 8, 1963

_________________________________

HARVARD UNIVERSITY
Department of Economics

Written Exam in Economic Theory
November 13, 1962

ANSWER ANY 7 (AND ONLY 7)
AMONG THE FOLLOWING QUESTIONS.

Questions are all of equal weight.

Use a separate book for each question.

(Please write legibly. Please write, on your first exam book, a phone number or address where you can be reached quickly in the event your exam book, because of handwriting, has to be transcribed and the typist cannot decipher some of your writing.)

Compare the views and arguments of Ricardo, the Austrians, and Marshall, on the question of the roles of utility and demand, and of cost of production and supply, in determining the prices of the goods produced in a competitive economy.
Construct a simple (static) general equilibrium model of a closed national economy, and show how it can be used to explain employment, prices, wage rates and the distribution of national income between capital and labor.
Indifference surfaces of an individual’s ordinal utility function are defined by

U = x^1/3 y^1/3 z^1/3

where U is utility and x, y, and z express quantities of three different products consumed. The individual himself produces 1 unit of x, 2 units of y, and 3 units of z.

1. Derive the equilibrium levels of consumption of the three products as a function of relative prices;
2. Derive the demand (supply) curves for the three products, and show as an application the quantities of x, y, and z demanded or supplied in the case where all money prices are equal;
3. Derive the relative prices that would have to prevail in a competitive market to keep the individual at autarky.
Compare and evaluate critically the solutions of duopoly proposed by at least 3 of the following: Cournot, Bertrand, Stackelberg, and Fellner.
Keynes maintained that an economy could be in equilibrium with a substantial amount of involuntary unemployment, but many other economists feel that an equilibrium in which an important market is not cleared is a contradiction in terms. Explain the concept of macro-economic equilibrium and in the light of this explanation sketch Keynes’ justification of his position and the Pigou-Patinkin refutation of it.
Present the argument according to which indirect taxes reduce the efficiency of the economic system, while a direct income tax does not, and show how the validity of this argument is affected by the existence of consumers’ choice between work and leisure.
Write on “increasing returns” with respect to (a) the firm; (b) the industry; and (c) the whole economy. In each case you should discuss at least: explanations of the phenomenon, how it affects the efficiency of the competitive pricing mechanism, and the question of stability or instability of equilibrium.
Point out and discuss what seem to you the most important similarities and difference between (a) Marx’s, and Schumpeter’s, theories of economic development under capitalism.
Discuss the problem of excess capacity in firms or in groups of firms. What different meanings may the phrase have? To what extent and way would you expect to find excess capacity in (a) static equilibrium; (b) a fluctuating economy; (c) a growing economy.
“Comparative advantage” is typically elaborated in the context of international or interregional trade. Generalize the concept as an economic principle and discuss the reasons you think account for its conspicuous association with international economics.
Discuss the theoretical significance of the distinction between net and gross investment in models of economic growth incorporating technological change.

You may keep this question sheet when you hand in your exam books.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

November 19, 1962

From: T. C. Schelling

To: Messrs. E. H. Chamberlin, W. W. Leontief, and J. Vanek

Subject: Written Examination in Economic Theory

Seven students took the exam, and we have a total of forty-two questions, each in a separate book. I had managed to allot the questions so that each of us grades either ten or eleven books. I am asking Chamberlin to grade questions 1 and 9, Leontief 2, 7, and 11, Vanek questions 3, 4, 8, and 10, Schelling questions 5 and 6. Wassily and I get eleven a-piece, Ed and Jaroslav get ten a-piece.

If you are interested in what the students chose, it is follows:

Question 1 — 6	7 — 5
2 — 4	8 — 5
3 — 1	9 — 4
4 — 4	10 — 1
5 — 5	11 — 2
6 — 6

Enclosed, for each of you, are the books you should grade.

Each book will have a second reader. I will redistribute them as they come back. Some may need a third reader.

As we agreed, let’s grade them “excellent,” “good,” “fair,” and “fail,” with plus and minus as appropriate, and for averaging we will treat the intervals between grades as numerically equivalent. For borderlines between pass and fail, if any, we can reconsider the scaling system.

The immediate urgency is only in letting students know whether they are still preparing for orals. When I asked, none were scheduled for before Christmas. But I would like to finish the grading by the middle of next week if we can. If you can read your books before Thanksgiving, so I can redistribute them next Monday, it would help.

[After a] quick check I did not notice any with an impossible handwriting, [and] if you wish you may ask Joyce to get your books transcribed. That will slow us down, but I believe it is worthwhile. If you lose any books, we all hang together.

P.S. I suggest you not write your grade on the book. Each of us is then free to do a second reading unconstrained. Instead, turn in a sheet for each question with a grade corresponding to each student number; the number in red pencil is the code for the individual student. Please return your books and grade sheets to Joyce.

TCS: ac

Enc.

_________________________________

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Robert R. Bowie, Director
Alex Inkeles
Henry A. Kissinger
Edward S. Mason
Thomas C. Schelling

6 Divinity Avenue
Cambridge 38
Massachusetts

December 7, 1962

From: T. C. Schelling

To: Messrs. Chamberlin, Leontief, and Vanek

Subject: Theory Exam Grades

I have communicated to the Departmental office that all six who took the exam have passed. Wassily and I agreed on the phone that we should add to the dosier of the two poorest ones our scepticism that they are qualified for a Ph.D, and urging the oral examining committee to take very seriously the unsatisfactory quality of their theory exam. I shall set up a meeting this week at which we can settle on the grades for these students and work out language to meet Wassily’s point.

In preparing some statistics for you I discovered some minor errors in my tabulation; these raised the lowest grades by about one point in total, or 1/14th of a point for the grade average.

Attached is a tabulation that gives the two grades by student, by question, and by grader — the capital letters are the initials of the four graders.

I will call you to set up a meeting. At that time we can also discuss what we want to report to the Department, if anything.

The names of the students, with their scores, are as follows:

Book	Student	Score
6	[name deleted]	30.0
3	[name deleted]	23.3
5	[name deleted]	22.0
1	[name deleted]	18.0
2	[name deleted]	16.3
4	[name deleted]	14.3

TCS:ac

Theory Exam Grades*

Question		Student
Question		1	2	3	4	5	6
1	C	2-	1	2-	1	2+	2
1	V	2+	2	2+	2-	3-	2+
2	S			2-	2-		2+
2	L			0	0		0+
3	V					2+
3	L					0+
4	C		2	1		2	3
4	V		2	2+		3-	3-
5	S	2-	1	3		2	1
5	V	2-	1+	3-		2	3-
6	S	0+	0	2-	1	1	2-
6	L	1-	0	2	0	1-	3
7	C	2	1	2-	1-	0+
7	L	2	1	1	0	1
8	S	2-	1	1-	2-		3
8	V	2-	2-	2-	2		3-
9	C	1	1+		1+		1+
9	L	1	1		1		2
10	S	0-
10	V	1-
11	V				1+	2-
11	L				1	1
Total points**		18.0	16.3	23.3	14.3	22.0	30.0
Average		1.28	1.17	1.66	1.02	1.57	2.15
No. of excellents**		0	0	2	0	2	6
No. of fails**		2	2	1	3	2	1

*Scoring: Excellent = 3, Good = 2, Fair = 1, Fail = 0, with 1/3 point for (+) and (-).

**For fourteen grades, two on each question.

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library. Economists’ Papers Archive. Edward H. Chamberlin Papers, Box 18, Folder “Written Theory Committee, 1963-64”.

Tags Chamberlin, Leontief, Schelling, Vanke

Exam Questions Harvard Suggested Reading Syllabus

Harvard. Reading List and Final Exam for Games and Strategy. Schelling, 1963

Post author By Irwin Collier
Post date 2022-05-13
2 Comments on Harvard. Reading List and Final Exam for Games and Strategy. Schelling, 1963

Thomas Schelling was hired by the Harvard economics department as a professor in 1958. According to the Harvard course catalogues, he taught the undergraduate course “Games and Strategy” nine times during the 1960’s. This post provides the syllabus/reading list and final exam for that course from the first term of the 1963-64 academic year.

Materials from Schelling’s course “Economics and National Security” that he taught in 1960 and from his 1970 course “Conflict, Coalition and Strategy” have been transcribed and posted earlier here at Economics in the Rear-view Mirror.

________________________

Course Announcement

Economics 135. Games and Strategy

Half course (fall term). M., W., F., at 10. Professor Schelling

Theories and experimental studies of rational decision in conflict, collusion, coalition, bargaining, collective decision, arbitration, and uncertainty.

Source: Official Register of Harvard University. Vol. LX, No. 21 (September 4, 1963): Faculty of Arts and Sciences. Courses of Instruction for Harvard and Radcliffe 1963-1964, p. 103.

________________________

Economics 135
Games and Strategy
Fall, 1963

Reading Assignments

PART I. COPING WITH AN INTELLIGENT ADVERSARY

Rapoport, Anatol: Fights, Games and Debates, Chapters 7, 8, 9; pages 130-165. (35 pages)
Williams, John D.: The Compleat Strategyst, Chapters 1, 2; pages 1-85, and Chapter 3, pages 86-91 then scan rest of chapter. (91 pages)
Hitch, Charles J. and McKean, Roland: The Economics Defense in the Nuclear Age, Chapter 10, “Incommensurables, Uncertainty, and the Enemy,” pages 182-205. (23 pages)
Read, Thornton: “Strategy for Active Defense,” Papers and Proceedings of the AEA, American Economic Review, Vol. 51, No. 2, May 1961, pp. 465-471.
Alchian, Armen A.: “The Meaning of Utility Measurement,” American Economic Review, Vol. 43 (March 1953) pages 26-50. (25 pages)

(OPTIONAL: R. Duncan Luce and Howard Raiffa, Games and Decisions, Chapters 1-4, pp. 1-87.)

PART II. COERCION AND DETERRENCE

Schelling, Strategy of Conflict, Chapters 1, 2, 5, 7, 8; pages 3-52, 117-161, 175-203. (121 pages)
Ellsberg, Daniel: “The Theory and Practice of Blackmail,” (38 pages) mimeograph
Schelling: “The Threat of Violence in International Affairs,” Proceedings, 57th Annual Meeting, American Society International Law. (INT. 16.8)
Stevens, Carl M.: Strategy and Collective Bargaining Negotiation, chapters 3 and 5, pages 27-56 and 77-96. New York: McGraw Hill, 1963.

PART III. MUTUAL RESTRAINT

Kenneth: Conflict and Defense, Chapters 1, 2, 6, pp. 1-40, 105-122. (58 pages)
Schelling: Chapters 3, 4, 9, 10; Appendix A; pages 53-118, 207-254, 257-266. (121 pages)
Cassady, Ralph, Jr.: “Taxicab Rate War,” Journal of Conflict Resolution, Vol. 1, pages 364-8 (December, 1957). (5 pages)
Valvanis, Stephan: “The Resolution of Conflict When Utilities Interact,” Journal of Conflict Resolution, Vol. 2 (June 1958) pages 156-69. (13 pages)
Rapoport, Chapter 10, pp. 166-79 (14 pages)
Boulding, Chapters 12, 13, pp. 227-73.
Schelling: “War Without Pain and Other Models,” World Politics, XV, (April, 1963) pp. 465-487.

PART IV. COLLECTIVE DECISION AND ARBITRATION

Farguharson, Robin: “Sincerity and Strategy in Voting,” mimeograph (February 5, 1955) (7 pages)
Black, Duncan: “On the Rationale of Group Decision Making,” Journal of Political Economy, Vol. 56 (February, 1948), pages 23-34 (12 pages)
Steinhaus, Hugo: “The Problem of Fair Division,” Econometrica, Vol. 16 (January, 1948), pages 101-109. (9 pages)
Dahl, Robert A.: A Preface to Democratic Theory, Chapter 2, pages 34-60, with special attention to notes 9 and 12, pages 42-43 and 43-44. (26 pages)
Rapoport, Chapter 11, pp. 180-194. (15 pages)
Rapoport, Chapter 12, pages 195-212. (17 pages)

PART V. EXPERIMENTAL GAMES

Flood, Merrill M.: “Some Experimental Games,” Management Science, Vol. 5 (October, 1958) pages 5-26. (22 pages)
Kaplan, Burns, and Quandt: “Theoretical Analysis of the Balance of Power,” Behavioral Science, Vol. 5 (July, 1960), pages 240-52. (12 pages)
Schelling: Chapter 6, pages 162-72. (11 pages)
Rapoport: Chapter 13, pages 213-25. (12 pages)

READING PERIOD

Burns, Arthur L.: “A Graphical Approach to some Problems of the Arms Race,” Journal of Conflict Resolution, Vol. 3, pages 326-42. (16 pages)
Thibaut, John W. and Kelley, Harold H.: The Social Psychology of Groups, Chapter 7, pages 100-125. (26 pages)
Goffman, Irving: “On Face-Work,” Psychiatry: Journal for the Study of Interpersonal Processes, Vol. 18 (August 1955), pp. 213-31.
Twain, Mark, “The Man that Corrupted Hadleyburg,” in The Complete Short Stories of Mark Twain.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003. Box 8, Folder “Economics, 1963-64”.

________________________

FINAL EXAMINATION
ECONOMICS 135
January 29, 1964

ANSWER ALL FIVE QUESTIONS: The first two questions should take no more than ten or twenty minutes each, allowing at least forty-five minutes each for the last three.

The following entry was submitted to the PUNCH “Toby competition” calling for an “unpleasing codicil to a will,” and received a runner-up award in the issue of July 6, 1960:

To my daughter, Judith Georgina Margaret, I leave my house, land and all my worldly possessions therein on the condition that it should be run as either an hotel, a college for gardeners or a rest-house for disappointed Beatniks.

My cash and capital are to be put into a trust. My widow, three daughters and nine grandchildren will each have an equal share in the trust. No income or capital can be drawn from the trust until the will is contested by a legatee. If this happens, the contesting legatee will lose his share to the others. If the others pay compensation for this loss, all capital will go untied to a charity.

Describe and discuss in game-theoretical terms the arrangement described in the second paragraph. Draw a matrix to represent it. (For purposes of the matrix, you may reduce the number of legatees to two.) Include, with respect to the two-person matrix, any pertinent references to a “solution,” “equilibrium point,” dominant or dominated strategies, or “efficiency” of outcome.

It has been observed that for many people an important criterion in sending or not sending a Christmas card to someone is whether or not they expect to receive one from the person. They would be embarrassed if they received one and had not sent one, but would rather not bother sending one unless they were going to receive one. They might also not wish to embarrass the recipient by sending a card he did not expect and implying he had been negligent. It may not be going too far to suppose that some people, in deciding whether or not to send a card, recognize that the other person, in deciding whether or not to send his card, is wondering whether or not he will get a card.
Draw a matrix corresponding to this situation, explaining your choice of numerical payoffs, and analyze the situation in familiar fashion.
Two companies, Vitamins, Inc. and Hormones, Inc., sell to groups of potential customers that partially overlap. Some potential consumers of vitamins can meet their needs with hormones, but not all of them; and some potential consumers of hormones can meet their needs with vitamins, but not all of them. Prices are such that the two commodities are pertinent[sic, “perfect”?] substitutes for each other within the overlapping market. Advertizing is the principle form of competition between the two companies. Advertizing also increases, for Vitamins, Inc., sales to those who have no interest in hormones, and similarly for Hormones, Inc.
The total advertizing budgets for the two companies are fixed by long-term contracts. In the short run they can vary the content of their advertizing. Specifically, the vitamin company can emphasize those uses of vitamins that compete with hormones or those uses that do not. If it emphasizes the uses that do compete, it tends to increase its share of the common market; if it emphasizes the virtues peculiar to vitamins it will increase consumption of vitamins by those who have no interest in hormones but will tend to lose in the market common to both. And similarly for the hormone company. A good deal of research has been done by both companies, leading to advertizing policies that take the rival’s advertizing campaign into account.

V has settled on the following policy:

1. 1. If H puts less than 20% of its budget into competitive advertizing, V will put none into that form;
  2. If H puts 20% or more into the competitive form, V will put the same percentage into competitive advertizing as H does.

H has arrived at the following policy:

1. 1. If V puts less than 25% into competitive advertizing, H will put twice that percentage into competitive advertizing;
  2. If V puts 25% or more into competitive advertizing, H will put exactly 50% into that form.

The Problem:

1. Sketch the “partial equilibrium curves,” and analyze what may happen if each of the two firms simply reacts to what it sees the other doing.
2. If H gets sophisticated and understands V’s behavior (but V goes on just reacting to what Hdoes), what policy do you expect H to follow, with what result?
3. If both get sophisticated and realize the nature of their interacting policies, how does your analysis change?
4. Reinterpret this problem in terms of two countries with fixed defense budgets, allocating their military resources into “offensive” and “defensive” components.

A three-man board composed of A, B, and C, has held hearings on a personnel case involving an officer of the company. This officer was scheduled for promotion but, prior to final action on his promotion, he took a decision that cost the company a good deal of money. The question is whether he should be (1) promoted anyway, (2) denied the promotion, or (3) fired.
The board has discussed the matter at length and is unable to reach unanimous agreement. In the course of discussion it has become clear to all three of them that their separate opinions are as follows:

A considers the officer to have been a victim of bad luck, not bad judgment, and wants to go ahead and promote him but, failing that, would keep him rather than fire him.
B considers the mistake serious enough to bar promotion altogether; he’d prefer to keep the officer, denying promotion, but would rather fire than promote him
C thinks the man ought to be fired but, in terms of personnel policy and morale, believes the man ought not to be kept unless he is promoted, i.e. that keeping on an officer who has been declared unfit for promotion is even worse than promoting him.

To recapitulate, their preferences among the 3 outcomes are:

	Promote	Keep	Fire
A	1^st	2^nd	3^rd
B	3^rd	1^st	2^nd
C	2^nd	3^rd	1^st

They must proceed to a vote. Voting is by majority. These are the two alternative procedures for voting, and they must first vote on which procedure to use. These alternative procedures are:

1. Decide first, by majority vote, whether or not he is guilty of a mistake. If (I) he is not found guilty, promote him; if (II) he is found guilty, decide by another majority vote whether to (i) fire him or (ii) to keep him.
2. By majority vote decide first, as a matter of principle, on the proper course of action if he is guilty — (I) to fire him or (II) to keep him without promotion. Then, once the appropriate penalty has been decided, decide by another majority vote whether he is guilty or not,

(i) promoting him if not guilty, otherwise
(ii) proceeding in accordance with the penalty decided on (I or II) in the first vote.

They must first elect one of the two procedures. They do this, too, by majority vote. They first hold a majority vote to choose procedure 1 or 2; they then vote in accordance with the procedure so selected.

Assume that (a) everyone’s preferences among the three outcomes are fully evident as a result of discussion, (b) everyone is shrewd enough and willing to vote in whatever fashion will attain his own preferences, and assumes everyone else will do the same, (c) voting is silent, by simultaneous ballot, and (d) no “deals” can he made among the three voters as to how they will vote.

The question:

1. 1. What happens to the officer? Promoted, just kept, or fired?
  2. Which of the two voting procedures, 1 or 2, did they elect to use?
  3. What would have happened to the officer if board-member A had preferred not to promote him?
  4. What might have happened if A and B could make a deal and vote accordingly?
  5. Describe some third majority-vote procedure which if it were used, would lead to the officer’s being kept (pursuant to the board’s preferences in the above table).

Goffman says, “To study face-saving is to study the traffic rules of social interaction. …By face-work I mean to designate the actions taken by a person to make whatever he is doing consistent with face. …Thus poise in one important type of face-work, for through poise the person controls his embarrassment and hence the embarrassment that he and others might have over his embarrassment.”

See how far you can go in treating “poise” and “embarrassment” by a Richardson-process interaction model along the lines of Boulding or Valavanis.

Source: Papers Printed for Midyear Examinations [in] History, History of Religions, …, Economics, …, Naval Science, Air Science (January, 196) in the bound volume Social Sciences, Final Examinations January 1964 (HUC 7000.28, no. 150).

Image Source: Harvard Kennedy School Magazine, Summer 2012.

Tags Schelling

Economist Market Economists Johns Hopkins Yale

Yale. Evsey Domar’s Letter of Support for Promotion of Thomas Schelling to Full Professorship, 1957

Post author By Irwin Collier
Post date 2022-03-21

For anyone whose experience in academic hiring and promotions has only been acquired over the past several decades, it might come as a shock that outside letters to support a department’s vote to offer a full professorship back in the 1950s would hardly exceed the length of a very modest thread of tweets today. To be honest, a thumbs-up emoji would have been an adequate response to Yale’s request for Evsey Domar’s opinion on the work of Thomas C. Schelling.

Since the two letters transcribed for this post are so short, I figure that this is as good an opportunity as any to add a brief bio written for the 1962 Radcliffe Yearbook. The poor quality of the yearbook image is a pity, but at least we have a classic Harvard professorial pose complete with a bow-tie and a cigarette held à la Madmen.

_____________________________

From the 1962 Radcliffe Yearbook

THOMAS C. SCHELLING, Professor of Economics, graduated from high school just after the Great Depression. Upon entering the University of California in Berkeley, he decided to major in economics: “Somehow I felt that the social conflicts, the severe poverty, even the problems of war, were partly solvable by a knowledge of economics.” He graduated with an A.B. in 1944 and got his Ph.D. at Harvard in 1951.

Professor Schelling’s varied career background includes two years with the Marshall Plan (in Copenhagen and in Paris, 1948-50); Associate Economic Adviser to the Special Assistant to the President (1950-51); Officer-in-charge, European Program Affairs, Office of the Director for Mutual Security, Executive Office of the President (1951-53); Yale University (1953-58); the RAND Corporation (1958-59). He has been at Harvard since 1959, on the faculty and says, “Harvard students are more interesting to teach than those at Yale.”

Primarily interested in the relationship between economics and national security, Professor Shelling recently collaborated on Strategy and Arms Control, published in 1961. Other works include National Economic Behavior, International Economics, and numerous articles in various periodicals.

Although teaching and consultation in foreign policy (he is a member of the Scientific Advisory Board, U.S. Air Force) take up most of his time, Professor Shelling is now turning his research interests to the problems of bargaining and conflict management, particularly as these problems affect foreign affairs.) Professor Schelling feels that, although a nuclear test moratorium would be a good thing, test bans without some system of control or inspection are unworkable. Furthermore, he feels that cessation of tests alone is not a potent form of disarmament. As for the testing itself, we don’t really know whether testing is necessarily harmful.

Source: The 1962 Radcliffe Yearbook, p. 91.

_____________________________

Yale Requests Domar’s Opinion of Schelling

Yale University
Department of Economics
New Haven, Connecticut

Lloyd G. Reynolds, Chairman

February 18, 1957

Professor Evsey Domar
Department of Political Economy
Johns Hopkins University
Baltimore 15, Maryland

Dear Evsey:

The Department here has voted to promote Thomas C. Schelling to the rank of Professor of Economics. We are now about to begin putting the appointment through the regular committee procedures. It is customary at this stage to invite a number of leading scholars in other institutions to appraise the qualifications of the candidate. I should be grateful if you could take time to write me your impression of Schelling—the quality of his thinking and scholarship, his probably contribution to economics over the long run, his professional standing in comparison with other men of about his own age, and his general suitability for a professorship here.

We shall value your judgment and I am sure will find it helpful in putting the matter before our faculty for action.

Sincerely yours,
[signed] Lloyd

LGR/shd

_____________________________

Copy of Domar’s Response

25 February 1957

Professor Lloyd G. Reynolds
Chairman
Department of Economics
Yale University
New Haven, Connecticut

Dear Lloyd:

This is in response to your letter of February 18 regarding the qualifications of Thomas C. Schelling.

I have known him approximately since 1944 or 1945 and have read most of his writings. He is an exceptionally capable young man, endowed with creative intelligence and with common sense. I have the highest opinion of him as an economist and great hopes regarding his contribution to economics.

In comparison with other men of his age he stands out very close to the top. I would support his promotion most wholeheartedly.

Sincerely yours,

Evsey D. Domar
Professor of Political Economy
The Johns Hopkins University
(on leave, spring term, 1956-57)

EDD:am

Source: Duke University. David M. Rubenstein Rare Book & Manuscript Library, Economists’ Papers Archive. Evsey D. Domar Papers, Box 8, Folder “Yale University (1 of 2)”.

Image Source: Thomas Schelling portrait, 1964. Harvard University. Office of News and Public Affairs. Hollis Images olvwork369281.

Tags Domar, Reynolds, Schelling

Economists Harvard War and Defense Economics

Harvard. Reactions to Galbraith’s call for students to boycott professors doing classified government research, 1967

Post author By Irwin Collier
Post date 2021-02-15

Looking through my files of material from the Gottfried Haberler papers at the Hoover Institution Archives, I came across an unpublished, heavily sarcastic “letter to the editor” of the Harvard Crimson by the economic historian Alexander Gerschenkron in reaction to John Kenneth Galbraith’s statement at an anti-war event at Radcliffe in which he suggested that students could reasonably consider boycotting the classes of professors engaged in classified research to protest that war. One of Galbraith’s targets was clearly his colleague Arthur Smithies. (“I assume that Professor Smithies would suppress all protest. Many will doubt the wisdom of this course as also, I trust, the wickedness of the secret work on which he is engaged.”) While the rules of English grammar are such that Galbraith did explicitly state “many will doubt…the wickedness of [Smithies’] secret work…”, it is a pretty cheeky way to simultaneously mention that there are indeed some who will see Smithies’ secret work in a wicked light.

The post ends with a later Harvard Crimson article that reports on Smithies’ career, with considerable emphasis on his work for the U.S. government (including the C.I.A.) on South Vietnam’s economy. We also see below that Thomas Schelling was so little amused by Galbraith’s boycott proposal as to have written a letter for actual publication in the Harvard Crimson.

_________________________

“Galbraith Asks Campus Blacklist of Recruiters”

The Boston Globe. 14 November 1967 pp. 1,9.

Harvard economist John Kenneth Galbraith urged Monday that college students oppose the Vietnam War by publicly blacklisting war-linked campus recruiting agencies and by boycotting professors engaged in classified government research.

Speaking at Radcliffe College, Galbraith explained his blacklist as a “proclamation” on which signatories would state their intention to refuse to work for agencies, such as Dow Chemical Co. or the C.I.A.

A boycott of professors engaged in classified research, he said, would be a “particularly effective way of expressing your opposition.”

The former U.S. ambassador to India, publicly backed “moderate” student demonstrations before a packed Harvard Radcliffe group in Hilles Library.

He cautioned the students against protests that are “violent or in egregiously bad taste.”

These, he said, would “provide a welcomed handle for the opposition.”

Galbraith said he had discussed his blacklist and boycott proposals with colleagues and many found them favorable. He called both courses “legitimate means of dissent within the university framework of conduct rules.”

He originated the black-list concept at talks with business and government leaders who indicated that recruiters are “greatly concerned with campus recruiting demonstrations,” Galbraith said.

Turing to anti-war referenda, Galbraith advised they would have more chances of success if they were worded “for political reality rather [than] for candor.”

The San Francisco anti-war referenda would have had a good chance for approval had it been stated in “milder” terms, he said. (This referendum, which asked: ‘should the U.S. immediately withdraw from Vietnam?’ drew a 38 percent affirmative response.)

“It would be an enormous mistake to assume your protest efforts have been futile,” he told students. Only three years ago, he said the State and Defense Departments” would have assumed wide spread acceptance of escalation.

“But now, in the wake of widespread university opposition to the war, there has been a snowballing effect of mounting opposition.”

His talk was sponsored by the Committee for Effective Action, a student group “opposed to the war but frustrated by the means of opposing it,” explained its spokesman. This was the first of an expected four or five meetings with the faculty.

_________________________

Letter from John Kenneth Galbraith

The Harvard Crimson, November 16, 1967

To the Editors of the CRIMSON:

My distinguished colleague may be out of touch with recent discussion, but the issue is probably worth explaining. Students here and elsewhere have been told how they may not react to university involvement in military activities of which they disapprove. With other Faculty members I assume that this carries an obligation to say how they may react. I suggested (initially in Michigan and later here) that they organize to avoid employment in corporations of whose products they disapprove and classes of professors whose secret contracts they deplore. (I also suggested that this last was inapplicable under Harvard policy and that there be combined effort to find other forms of legitimate and effective protest.) I assume that Professor Smithies would suppress all protest. Many will doubt the wisdom of this course as also, I trust, the wickedness of the secret work on which he is engaged.

John Kenneth Galbraith
Paul M. Warburg Professor of Economics

_________________________

Unsent, but circulated, reaction to Galbraith’s proposal
by Alexander Gerschenkron

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

M-7 Littauer Center
Cambridge 38, Massachusetts

Alexander Gerschenkron
Walter S. Barker Professor of Economics

November 16, 1967

The Editor
The Crimson
Cambridge, Massachusetts 02138

Sir,

It is with greatest possible interest that I have read of Professor Galbraith’s suggestion that students should boycott lectures of those members of the Faculty who are known to engage in classified research. This is a most original and stimulating idea, which is not surprising as nothing less novel and exciting could be expected from Professor Galbraith’s fertile mind.

The only thing that disturbs me are problems of implementation. Professor Galbraith abstained from discussing them, probably feeling that what mattered was to cast abroad a fine idea, while the rest could be safely left to more pedestrian minds. May I try to fill out the gap? Obviously, the first thing that is needed is to provide some machinery in order to discover just who is engaged in classified research. I suggest therefore, that the Student-Faculty Committee should immediately establish a special Sub-Committee charged with carrying out the requisite investigations. It should be called “Student-Faculty Sub-Committee on Un-Left Activities.” This Sub-Committee should interrogate members of the faculty. A difficulty to be faced will no doubt stem from the lack of subpoena powers on the part of the Sub-Committee. But the problem should not be insoluble. The Administration should be put under pressure to agree that those members of the Faculty who 1) refuse to appear before the Un-Left Sub-Committee or, 2) if appearing, refuse to name those colleagues whose connection with classified research is known to them, or 3) refuse to answer questions concerning their own classified research, should be informed by the Administration that such refusals constitute contempt of the Un-Left Sub-Committee, and, by the same token, must be regarded as acts of gross misconduct. In all fairness, the offenders should be given a fortnight to reconsider, but should they stubbornly persist in their hostile attitude, their connection with the University should be severed without further delay.

On the other hand, should the Administration hesitate to accede to the Sub-Committee’s fair and reasonable demands, which as Professor Galbraith likes to say are surely justified by the extraordinary situation in which the country finds itself, occupation of University Hall by the students should be the first natural step, if necessary, to be followed by other more stringent measures.

Thus Professor Galbraith’s idea appears to be altogether practicable. In conclusion, I cannot help praising his wise restraint. He could have suggested, for instance, that also lectures of those Faculty members who either themselves express Un-Left opinions or associate with colleagues who have expressed Un-Left opinions should be boycotted by the students. That he failed to make such suggestions agrees well with the sapient counsels of moderation which informed his speech.

Very truly yours,
[signed]
Alexander Gerschenkron

AG:dod

Note: For reasons well within this writer’s control, the foregoing epistle has failed to reach the editorial office of The Crimson.

Source: The Hoover Institution Archives. Papers of Gottfried Haberler, Box 12, Folder “GH—Alexander Gerschenkron”.

_________________________

Letter from John Kenneth Galbraith

The Harvard Crimson, November 16, 1967

To the Editors of The CRIMSON:

I am persuaded that at some risk of repetition I should be sure that there is no misunderstanding of my recent remarks on legitimate and non-violent forms of student protest as these concern University involvements with military activities. Two or three weeks ago in Detroit I was asked to comment on prospective efforts to obstruct physically the Willow Run laboratories operated on contract by the University of Michigan and engaged, I am told, on development of highly secret materiel for use in Vietnam. I urged not alone the futility but the adverse public effects of such action; I said that a better remedy lay against the Faculty members who ran this enterprise. Students might organize to avoid their classes, i.e., peacefully to boycott them. Last Monday evening at the meeting in the Hilles Library arranged by [Radcliffe] President Bunting to discuss legitimate forms of protest I repeated (along with others) this suggestion and added that this particular one would not be without effect on those who sponsored such work in a university but that it did not have application at Harvard where, wisely, the Administration frowned on secret contracts. I confess that I did not think of the possible application of my suggestion to confidential or secret consulting work or research by individual Harvard professors. A member of the Faculty has since invited the attention of those who are, with sufficient reason, sensitive to the association between the University Community and this war. Additionally, my reference to boycott, which of course means peaceful abstention, was evidently taken to mean some kind of physical action.

I would like to urge in the most earnest possible fashion that there be no effort by anyone, students in particular, to identify and oppose in any manner the individual participation by Faculty members in confidential or secret tasks of the government. There is a radical difference between this varied and individual work and the classified contracts for weapons development which I had in mind. This individual work covers a wide range of matters and much, or most, has no bearing on military activity. Most of it is the work of those Faculty members with the strongest instinct for public service. An effort to discriminate between approved and disapproved work would import into the academic community an improper concern for the extra-curricular pacifists who are so engaged as to those who are otherwise disposed. It could also be a most disagreeable source of tension and suspicion.

As members of the Harvard community will be aware, I am not indifferent to the Vietnam war. I regard it as an appalling tragedy; to no other matter of my adult life have I devoted more effort than to opposing the war. But I would be profoundly and also greatly embarrassed were anyone to take my remarks at Radcliffe as an invitation to any form of opposition to the participants of individual Faculty members, on a public or confidential basis, in government activities. Needless to say, none of this impairs in any way my promise at the Radcliffe meeting to work with concerned Faculty members and students to devise other effective, legitimate and non-violent forms of protest.

John Kenneth Galbraith
Paul M. Warburg Professor of Economics

_________________________

Letter from Thomas Schelling in response to Galbraith’s boycott proposal

The Harvard Crimson, December 5, 1967

To the Editors of the CRIMSON:

While I’ve seen no indication that Professor Galbraith’s proposed boycott of professors who do classified research for the government is going to stimulate a new movement, it does raise important questions about the personal activities of faculty members and the ways they may be involved with the government, and about the appropriate selection of target for protest. May I explain why I think his proposal is probably not workable and, if not workable, objectionable?

Let me first point out that Professor Galbraith did not propose that students boycott those professors whose research is objectionable, nor did he clarify what research would be objectionable. His reference was merely to “classified” research. I’m sure that by almost anyone’s standards of wickedness (Galbraith’s term) some classified research would be found unobjectionable. People concerned about the dissemination of nuclear technology, about the limitation of weapons, even about ways of ending the war in Vietnam, often require classified information to do their work or, at least, have to be exposed to classified information in doing their work and cannot do it unless they are willing to safeguard what the government calls “security.” Even if the character of everybody’s classified research could be ascertained, drawing the line between the objectionable and the unobjectionable, or between what any reasonable man would consider objectionable and what some reasonable men might consider to be in the public interest, would require subjective judgments. (Most classified research, incidentally, is probably unrelated to Vietnam.)

Second, much of the unclassified research that goes on would be objectionable to people who oppose any kind of war-related research; and to exclude such unclassified research would be arbitrary discrimination.

Third, “research” itself is difficult to define. Many faculty members are occasionally consultants or members of advisory boards in various agencies, or participants in government-sponsored conferences, sometimes classified, sometimes unclassified. Whether their influence is benign or malignant would be hard to judge; so would the degree of support or implied approval in attendance at a meeting at which one criticizes a government program or decision.

And if unclassified contributions had to pass the same strict test as classified work, to qualify for boycott or immunity from it, one would have to ask whether an activity like the Peace Corps is to be treated as a propaganda arm of the Johnson administration or as a benign and constructive activity. Again a judgment depends on a complex evaluation of the different purposes that a government program may serve.

Finally, are Faculty members who are unaffiliated with the government in any fashion, classified or unclassified, but who openly support the administration’s policy toward Vietnam, to qualify for boycott? It seems strange to exclude them; but again the line would be hard to draw for those who neither wholly support the conduct or the war nor are wholly committed to one drastic alternative. (It is unclear to me on which side of the line Professor Galbraith would be placed.)

I could go on multiplying the difficulties of finding a reasonable line to draw between the non-university-administered activities of professors that are objectionable and those that are not, whatever one’s standards of wickedness; and, further, I doubt whether there is enough consensus on standards to make it possible to draw an agreed line, even if some people think they know where to draw it. If I’m right about this, any line has to be arbitrary, as Professor Galbraith’s line was arbitrary. (If Professor Galbraith interprets his original proposal as applying only to university-administered research, the line is clearer but only because more arbitrary.)

If, though, the line is arbitrary–if its purpose just to mark out an identifiable target without regard to the nature of the research itself or of the non-research activity–then, aside from the likelihood that an embarrassingly large number of angels will be caught in the netful of devils, there is the question of what is being objected to and what the purpose of the boycott is. The purpose can no longer be described as bringing pressure to bear to get objectionable activities terminated. Rather, it would look–to me, at any rate–as though a boycott were being used to induce a particular group of professors to join a boycott against the government, or to embarrass them for declining to join a boycott.

Whatever my feelings about Professor Galbraith’s protest movement, I resent his proposal that students organize to coerce me into joining it. And I hope nobody stays away from Professor Galbraith’s classes in a vain organized attempt to embarrass him into changing his politics.

T.C. Schelling
Professor of Economics

_________________________

An Academic [Arthur Smithies] in the War
By Seth M. Kupferberg

The Harvard Crimson, May 23, 1975

Edward F. Chamberlin, superintendent of Kirkland House, tells a story about a Kirkland celebration that took place some years back, when Arthur Smithies was House master. Smithies was pouring drinks for the members of the victorious House crew team, starting with the bow man and working towards the stern of the shell, and as he reached the stroke, someone brought word that he had just become a grandfather.

“He kept right on—he just said, ‘Coxswain!'” Chamberlin recalls, chuckling. ‘”Coxswain, take your wine…’ We almost died.”

Smithies–Ropes Professor of Political Economy and a long-time adviser in the Saigon bureau of the Agency for International Development—gave up his mastership—”certainly Harvard’s best job,” he says—last spring. (“You can stay on past 66 as a professor but you have to retire as a master,” he grouses. “It should be the other way around—the brain deteriorates before the body does.”) But the story of the Agassiz Cup celebration still seems characteristic of him—both in content and in style, for a certain kind of sharp, logical humor as well as, perhaps, a certain cheerful indifference to happenings that would excite or upset or change the attitudes of many people. It’s a style, arguably, that found expression in Smithies’s work in Vietnam as well as his praise of the Agassiz Cup winners—and there, it was likely to have larger effects and meanings, since it served a side in an internecine war instead of an intramural regatta.

At the simplest, most straightforward level, the Agassiz Cup story is characteristic because it’s about crew—the sport that in 1929 helped bring Smithies, a 22-year-old Australian law student, the great-grandson of the first Methodist minister in western Tasmania, a Rhodes Scholarship. Finding England “too structured for my taste,” Smithies went on to discover “the fleshpots of the United States” with a Commonwealth Fellowship and a Model A Ford, earn a quick Harvard doctorate in economics, return to Australia briefly to work in its treasury department, then settle in the United States for good.

Smithies accepted tenure at Harvard in 1949—partly “so I could take up rowing again”—and continued to work at budgetary and fiscal economics. He also demonstrated an idiosyncratic kind of firmness—”I’m a believer in strict academic requirements, but for something important, like seat-races, I would make an exception,” he once told a Kirkland House oarsman. In its more political manifestations, many students came to find Smithies’s firmness objectionable. “People used to go around screaming ‘CIA Agent!’ and things at me,” he recalls. For when anti-ROTC students occupied University Hall in April 1969 and opened the files of then dean of the Faculty Franklin L. Ford, one of the letters they released to The Old Mole, the underground Cambridge newspaper that folded in 1970, was from Smithies. Dated December 7, 1967, it read: “The Central Intelligence Agency has instructed its consultants to inform their official superiors of this connection with the Agency. I hereby inform you of my connection of ten years duration. I wish I could, add that there is something subtly interesting or sinister about it.”

The tinge of self-mockery—the impatience of a person who takes certain things for granted, maybe—was typical: the same slight aloofness you sense when Smithies says he spends his free time “rowing boats and toiling in my garden,” as though the joys of domesticity in Belmont, like England, are a little too structured for his taste. But that didn’t stop the CIA letter from kicking up a minor storm.

“The CIA is divided sharply into two parts—covert and overt,” Smithies—who says he was most recently consulted by the agency, regarding a report on the future of the Vietnamese economy, last year—explains now. “For about ten years I’d go down there and review their papers on national economic matters: I’ve never been the cloak-and-dagger type. But naturally they made a big fuss about it,” he concludes, with something close to approval. “That’s good tactics.”

It was partly an exclusive attention to improving tactics—rather than more fundamental questions about the Vietnam war—that the University Hall occupiers and other Harvard radicals objected to in Smithies, even before they discovered his CIA letter, Smithies traces his service as an Agency for International Development consultant, advising the Republic of Vietnam on its fiscal policy and rates of international exchange, to previous foreign-affairs interests that included involvement in administering the Marshall Plan. He says he was regarded as a liberal both as a young teacher at the University of Michigan, where he defended the Michigan Daily‘s right to take leftist editorial stands, and in his early years in the Harvard Economics Department, where Keynesians like him were still an embattled minority.

And he still offers qualified praise for radical economists like Stephen A. Marglin ’59 or other members of the Union of Radical Political Economists—for aiming at a historical perspective on economic systems. “I think if they’d let me I’d be more of an ally than I am,” he says. “I don’t like a narrow concentration on Marx—I think it should also include Weber and people like that. I also and not a socialist, and URPE people generally are socialists—I firmly believe in the mixed economy.” For his part, Marglin says he agrees with Smithies’s stress on “the historical nature of economic theory and the fact that neo-classical theory is not the pinnacle of economic thought.” But he claims that Smithies shares orthodox economists’ bias toward marginal improvements that don’t call basic assumptions into question—”that perspective divides him pretty fundamentally from most URPE people,” he says.

Even setting aside Smithies’s belief in a mixed economy, Marglin’s criticism isn’t too surprising—budgetary economics by definition focuses on evaluating means, not ends, which it takes more or less for granted. Smithies’s book, The Budgetary Process in the United States, begins by calling a description of the ways the government sets its priorities “quite enough for one volume and one author,” and it offers only one assumption about how the budgetary process should end up—that “government decision-making can be improved by the clear formulation of alternatives.” Like his work on the budget, Smithies’s work on Vietnamese fiscal policy took its basic political framework more or less for granted.

And like the Agassiz Cup celebration, it was carried on with a certain quiet bravado, even in defiance of what many people might think of as reflex reactions to human events. Apart from his consulting work for AID—which kept him in.

During the height of campus anti-war activity, Smithies recalls, “People used to go around screaming ‘CIA Agent!’ and things at me.” Saigon most summers—Smithies wrote several reports, comparable to other American economists’ and political scientists’ attempts to improve the Saigon government’s chances and provide scientific descriptions of its progress.

Like these other writers, Smithies’s descriptions often reflected Saigon’s assumptions and interests, and so worked to limit debate in the United States and thus to keep the Saigon government strong. Not all American analysts acknowledged this political effect of their writing, but to many of their critics. It was its most important aspect. For the politics underlying questions of Vietnamese economic development included more even than questions about who should manage development and profit from it. The human, political context AID economists could all but ignore also included the struggle over these questions that was killing people and making them homeless, the struggle in which the government AID belonged to was playing an increasingly dominant part.

In a 1971 report commissioned by the Institute for Defense Analyses, called “Economic Development in Vietnam: The Need for External Resources,” and based on a “planning assumption” of “military stalemate and withering away of the war, a process that can last for a decade or more.” Smithies called for $500 million a year in American aid to the Saigon government “during the next decade,” and $700 million more in financing, preferably from an international consortium of countries, “for the indefinite future.” And while noting some of the bad effects of the war on South Vietnam’s economy—such as an unfavorable balance of trade, governmental corruption, the destruction of bridges and the defoliation of forests—Smithies also took note of countervailing factors, such as “the increase in the expectations of the Vietnamese people,” which he suggested would remain after “the horrors of war” had faded.

“The war has provided Vietnam with paved highways from end to end, with more airfields than it can possibly use, with spectacular harbors, with an elaborate communications system, with power plants, and with potable water in Saigon,” Smithies wrote.” …While it is impossible to make an accurate inventory of the changes in the infrastructure during the war, the impression is inescapable that the plusses greatly outweigh the minuses.” It was the kind of report that led Frances Fitzgerald ’62 to call AID economics “perhaps the ultimate expression of American hubris.”

Today, Smithies—who says he grew to like Saigon very much, despite a “very rarefied atmosphere” that necessitated weekly trips to the provinces for a reminder that there was a war going on—is naturally less sanguine. “Whatever the merits of the cause. I’m deeply disturbed to see the U.S. forced into a position of unconditional surrender under any circumstances,” he says. “And it’s not clear to me that there is still a clear direction to foreign policy.”

“I wouldn’t have gone there unless I thought the objective of a free and independent South Vietnam was a worthwhile one,” he continues, “and it’s fairly obvious that we didn’t pursue that role at all effectively.” Nevertheless, Smithies stresses American advisers’ accomplishments in such areas as improving rice strains—”whatever side you’re on politically, this was a useful thing,” he says—and the importance of combating “the impression that everyone connected with Vietnam was a scoundrel.”

“I think the economic staff there was really doing a good job,” he says. “In the economic and financial areas there were some very good Vietnamese and some very devoted and sincere Vietnamese—extremely able and also extremely patriotic. I can’t say the same for some of the corps commanders—but in the welter of recriminations there’s a tendency to forget what was good.”

* * *

It took just a few days after the Provisional Revolutionary Government’s victory last month for Smithies’s acquaintances to stop asking him, as at least one had the first day, about “the end of those summers in Saigon.” In the burgeoning New England spring, Saigon seemed very far away. It seemed more appropriate to remember smaller-scale settings for imperturbability in the face of exciting or famous or upsetting people or events—the Agassiz Cup celebration, say, or the Kirkland House dinner two years ago at which Smithies gave President Bok a long, pointed introduction, replete with references to “the days when the University was interested in education—before the present administration took office.” (“These occasions can get very stolid if you don’t liven ’em up a bit,” Smithies explains now. “I think one ought to be mildly provocative—what do you think?”)

At most, it seemed in keeping with the intoxicating spring weather to remember Smithies’s 1969 visit to occupied University Hall—the only one by a master, possibly helping to inspire his belief that by playing a “civilizing role,” “the House system vindicated itself in 1969 as I haven’t seen it do before or since.” Smithies says the visit was mostly a matter of bravado, “rather foolish. I suppose,” but he still seems proud of it—he’s supposed to have informed an occupier who called him an administration spy that he had “rather more right to be here than you do.” The occupiers voted to expel Smithies, but they allowed him to speak first. “It was rather reassuring, in a way,” he said, but the occupiers evidently weren’t sympathetic—”all I remember just what he said, but the occupiers evidently weren’t sympathetic—”all I remember is that it was philosophically weird,” one of them said recently.

Meanwhile, Smithies continued to teach macroeconomic theory, scull on the Charles, lunch in the Kirkland dining hall, even be mildly provocative, if only because senior English majors in the House were taking general exams, on such moderately unlikely subjects as the poetry of T.S. Eliot ’10. “My wife and I used to be very fond of Eliot—I think we still are,” Smithies explained later, but at lunch, he didn’t seem so sure.

“But is it poetry–the broad-backed hippopotamus?” he asked his companions, a little quizzically. Then he proceeded to rattle off three or four stanzas: The broad-backed hippopotamus Rests on his belly in the mud; Although he seems so firm to us He is merely flesh and blood…

“Is that poetry–or is it just a jingle?” he asked again. No one offered an immediate answer: things were back to normal.

Steven B. Geovanis

Image Sources: Left to right. Smithies and Galbraith from Harvard Class Album 1958; Gerschenkron from Harvard Class Album 1957.

Tags Chamberlin, Galbraith, Gerschenkron, Schelling, Smithies

Harvard Suggested Reading Syllabus

Harvard. Course Outline and Readings for Economics and National Security. Schelling, 1960

Post author By Irwin Collier
Post date 2019-07-04

According to the Annual Report of the President of Harvard for 1959-60 the following economic seminar taught by Professor Thomas C. Schelling during the Spring term had only two graduate students officially registered for the course (and they were probably from the Graduate School of Public Administration). In the following year fourteen students were enrolled in the course.

______________________

ECONOMICS 207
Economics and National Security
Spring 1960

READING ASSIGNMENTS

Note: Reading indented items is optional; but all starred items should be looked at even if not read carefully.

GENERAL BACKGROUND

Washington Center for Foreign Policy Research (Arnold Wolfers, Director). Developments in Military Technology and Their impact on United States Strategy and Foreign Policy, Committee Print, Committee on Foreign Relations, U. S. Senate, Dec. 6, 1959. Part C, “Technological Developments and the Strategic Equation,” Chapters 1-4, pp. 30-85.

National Planning Association, “1970 Without Arms Control”, A Special Committee Report, Planning Pamphlet 104, May 1958.

Davidon, William C., Kalkstein, Marvin I., Hohenemser, Christoph. “Prerequisites for Nuclear Weapons Manufacture”, in National Planning Association, The Nth Country Problem and Arms Control, Planning Pamphlet No. 108, Jan. 1960, pp. 11-28.

Glasstone, Samuel (ed.). Effects of Nuclear Weapons; Dept. of Defense and Atomic Energy Commission, 1957 edition, pp. 18-33, 90-96, 103-111, 196-202, 209-11, 212-15, 237-8, 345-8, 390-429, 446-54, 524-31, 536-43, glossary p. 544 ff.

I. EFFICIENCY IN MILITARY DECISIONS

Hitch, Charles J., McKean, Roland. “Defense as an Economic Problem”, “Efficiency in Military Decisions”, mimeograph.

Morse, Philip M., Kimball, George E. Methods of Operations Research, New York, The Technology Press and John Wiley and Sons, Inc. 1951, pp. 1-10, 38-60, 63-67 (scan 67-77), 77-80.

Hitch, Charles J. “Economics and Military Operations Research,”Review of Economics and Statistics, XL, 199-209, Aug. 1958.

Schelling, T.C. “Comment”, Symposium on Economics and Operations Research, Review of Economics and Statistics, XL, 221-224, Aug. 1958.

Hoag, Malcolm. “Some complexities in Military Planning,” World Politics, XI, 553-576, July 59.

Enke, Stephen. “Some Economic Aspects of Fissionable Material,”Quarterly Journal of Economics, LXVIII, 217-232, May 54.

Bowers, Robert D. (Col). “Fundamental Equations of Force Survival,” Air University Quarterly Review, X, 82-92, Spring 58.

Karchere, A. Hoeber, F.P. “Combat Problems, Weapons Systems, and the Theory of Allocation,” JORSA, Nov. 53.

Kahn, H. Mann, I. “Techniques of Systems Analysis,” The RAND Corporation, RM-1829-1, 3 Dec. 58 revised June 57, chapters 1, 2, 3, pp. 1-113.

* * * * *

Enke, Stephen. “An Economist Looks at Air Force Logistics,” Review of Economics and Statistics, XL, 230-39, Aug. 58.

Fisher, Gene H. “Weapon-System Cost Analysis,” Operations Research. Oct. 56, pp. 558-571.

Mendershausen, Horst. “Economic Problems in Air Force Logistics,” American Economic Review, Sept. 58, 632-648.

*Engel, J.H. “A Verification of Lanchester’s Law,” JORSA, May 54, II.

*Brackney, Howard. “The Dynamics of Military Combat,” Operations Research, VII, 30-44, Jan-Feb. 59.

*Firstman, Sidney I. “A Vulnerability Model for Weapon Sites with Interdependent Elements,” Operations Research, VII, 217-25, Mar-Apr. 59.

Weiss, Herbert K. “Lanchester-Type Models of Warfare,” Proceedings of the First International Conference on Operations Research. ORSA, Baltimore, 1957, pp. 82-99.

* * * * *

II. COPING WITH AN INTELLIGENT ADVERSARY

Kahn, Herman, Mann, Irwin. “Techniques of Systems Analysis,” Chapter 4, “The Two-Sided War,” pp. 114-131; Chapter 5, “Evaluation and Criticism,” pp. 132-161.

Schelling, T.C. “Assumptions About Enemy Behavior,” Lecture 12 in An Appreciation of Systems Analysis, The RAND Corporation, B-90, 1959. (Mimeograph).

Williams, John D. The Compleat Strategyst, New York, McGraw-Hill Book Co. Inc., 1954. Chapters 1 and 2, pp. 1-85. Rest of book optional; suggest scan several of the problems in remaining chapters.

Alchian, Armen A. “The Meaning of Utility Measurement,” American Economic Review, XLIII, 26-50, Mar. 53.

Luce, R. Duncan, Raiffa, Howard. Games and Decisions(New York, 1957), Chapter 2, pp. 2-17, 19-38; Chapter 4, pp. 56-76, 85-87.

Morse, Philip M., Kimball, George E. Methods of Operations Research, “Measure and Countermeasure,” pp. 94-102; “Theoretical Analysis of Countermeasure Action,” pp. 102-109.

* * * * *

Haywood, O.G. “Military Decision and Game Theory,” JORSA, Nov. 54.

*Hale, J.K., Wicke, H.H. “An Application of Game Theory to Special Weapons Evaluation,” Naval Research Logistics Quarterly, IV, 347-56.

*Dobbie, James M. “On the Allocation of Effort Among Deterrent Systems,” Operations Research, VII, 335-46, May-June 59.

Isbell, J.R., Marlow, W.H. “Attrition Games,” Naval Research Logistics Quarterly, III, 71-94.

*Blackett, D.W. “Some Blotto Games,”Naval Research Logistics Quarterly, I, 55-60, Mar. 54.

Thompson, S.P., Ziffer, A.J. “The Watchdog and the Burglar,” Naval Research Logistics Quarterly, VI, 165-72, June 59.

Caywood, T.E., Thomas, C.J. “Application of Game Theory in Fighter vs. Bomber Combat,” JORSA, III, Nov. 55.

*Antosiewicz, H.A. “Analytic Study of War Games,” NRLQ, II, 181-208, Sept. 55.

Isaacs, Rufus. “The Problem of Aiming and Evasion,” NRLQ, II, 47-68, May-June 55.

Zachrisson, L.E. “A Tank Duel with Game-Theoretic Implications,” NRLQ, IV, 131-38, June 57.

* * * * *

III. EXPERIMENT AND SIMULATION

Specht, Robert D. “War Games,” The RAND Corporation, P-1041, March 18, 1957.

Thomas, Clayton J., Deemer, Walter L. “The Role of Operational Gaming in Operations Research,” Operations Research, Feb. 57, 1-27.

* * * * *

Rauner, R.M. Laboratory Evaluation of Supply and Procurement Policies, The RAND Corporation, Report R-323, July 1958.

Thomas, Clayton L. “The Genesis and Practice of Operational Gaming,” Proceedings of the First International Conference on Operations Research; Operations Research Society of America, Baltimore, 1957. Max Davies, et al., eds. pp. 64-81.

Young, John P. “A Survey of Historical Developments in War Games.” Operations Research Office, The Johns Hopkins University, Staff Paper ORO-SP-98, March, 1959. (Mimeo, 108 pages plus bibliography.)

* * * * *

IV. THE STRATEGY OF POTENTIAL FORCE

Schelling, T.C. “The Retarded Science of International Strategy,” Bulletin of the Atomic Scientists, March 60.

Brodie, Bernard. Strategy in the Missile Age, Princeton, 1959. Ch. 1, “Introduction,” 3-20; Ch. 6, “Is There a Defense,” 173-222; Ch. 8, “The Anatomy of Deterrence,” 264-304; Ch. 9, “Limited War,” 305-357.

Wohlstetter, Albert. “The Delicate Balance of Terror,” Foreign Affairs, Jan. 59, pp. 211-234.

Sherwin, C.W. “Securing Peace through Military Technology,” Bulletin of the Atomic Scientists, XII, 159-165, May 56.

Schelling, T.C. “Bargaining, Communication, and Limited War,”Journal of Conflict Resolution, I, 19-36, Mar. 57.

Schelling, T.C. “The Strategy of Conflict: Prospectus for a Reorientation of Game Theory,” Journal of Conflict Resolution, II, 203-264, Sept. 58.

Rapoport, Anatol. “Lewis F. Richardson’s Mathematical Theory of War,” Journal of Conflict Resolution, I, 249-99, Sept. 57; Part IV, ‘The Mathematics of Arms Races,’ pp. 275-82.

Washington Center for Foreign Policy Research (Arnold Wolfers, Director), “Developments…” Part C. Chapters 5, 6; pp. 85-97.

Schelling, T.C. “Surprise Attack and Disarmament,” Bulletin of the Atomic Scientists, XV, 413-18, Dec. 59

* * * * *

Luce, R. Duncan, Raiffa, Howard. Games and Decisions, New York, 1957, Chapters 5, 6, pp. 88-154.

Washington Center for Foreign Policy Research (Arnold Wolfers, Director), “Developments…” etc. Part D, “The Development of Deterrent and Counterdeterrent Strategies,” pp. 98-104. Part E, “The Crisis of Strategic Nuclear Deterrence,” pp. 105-118.

Schelling, T.C. “Randomization of Threats and Promises,” The RAND Corporation, P-1716, June 5, 1959.

Schelling, T.C. “The Threat That Leaves Something to Chance,” Mimeograph, Center for International Affairs, Harvard University (no date).

Schelling, T.C. “The Reciprocal Fear of Surprise Attack,” The RAND Corporation, P-1342, revised May 58.

Rathjens, George. Ch. 4, in Klaus Knorr (ed.), NATO and American Security, Princeton 1959. “NATO Strategy: Total War,” pp. 65-97.

Hoag, Malcolm. “The Place of Limited War in NATO Strategy,” Ch. 5 of Klaus Knorr (ed.), NATO and American Security, Princeton 1959, pp. 98-126.

Szilard, Leo. “Disarmament and the Problem of Peace,” Bulletin of the Atomic Scientists, Vol. II, Oct. 55.

Kaplan, Morton. “Some Problems in the Strategic Analysis of International Politics,” Research Monograph No. 2, Center of International Studies, Princeton, Jan. 1959.

Kaplan, Morton A. “The Strategy of Limited Retaliation,” Policy Memorandum No. 19, Center of International Studies, Princeton, April 1959.

Kaplan, Morton A. “The Calculus of Nuclear Deterrence,” World Politics, XI, 20-43, Oct. 58.

Burns, Arthur Lee. “From Balance to Deterrence: A Theoretical Analysis,” World Politics, IX, 494-529, July 57.

Burns, Arthur Lee. “The Rationale of Catalytic War,” Research Monograph No. 3, Princeton Center of International Studies, Apr. 2, 59.

Rapoport, Anatol. “Lewis F. Richardson’s Mathematical Theory of War,” Journal of Conflict Resolution, I, 249-299, Sept. 57.

* * * * *

V. ECONOMICS OF DISASTER

Hirschleifer, Jack. “Some Thoughts on the Social Structure After a Bombing Disaster,” World Politics, VIII, 206-227, Jan. 56.

Tiryakian, Edward A. “Aftermath of a Thermonuclear Attack on the United States,” Social Problems, VI, 291-303, Spring 1959.

Enke, Stephen. “Controlling Consumers in Future Wars,” Quarterly Journal of Economics, LXXII, 558-573, Nov. 58

* * * * *

Bear, Donald V.T., Clark, Paul G. “Which Industries Would Be Most Important in a Postwar U.S. Economy?” (Mimeograph).

Hirschleifer, J. “War Damage Insurance, “Review of Economics and Statistics, May 53.

* * * * *

VI. EXTREMES AND INTANGIBLES IN SOCIAL CHOICE

Hitch, Charles J., McKean, Roland N. “Incommensurables, Uncertainty, and the Enemy,” (Mimeograph, 39 pages).

Kahn, Herman. “How Many Can Be Saved?” Bulletin of the Atomic Scientists, XV, 30-34, Jan. 59.

Joint Committee on Atomic Energy, “Biological and Environmental Effects of Nuclear War,” Summary Analysis of Hearings, June 22-26, 1959.

Committee on Government Operations, “Atomic Shelter Programs,” Thirty-fourth report of the committee, Aug. 12, 1958.

Deer, James W. “Whatever Happened to Civil Defense,” Bulletin of the Atomic Scientists, XV, 266-7 June 59.

Lapp, Ralph. “Local Fallout Radioactivity,” “Fallout and Home Defense,” Bulletin of the Atomic Scientists, XV, 181-86, 187-91, May 59.

Morgenstern, Oskar. The Question of National Defense. New York 1959, Ch. 5, “Attrition, Shelters and Recovery,” 104-133.

* * * * *

Schubert, Jack, Lapp, Ralph. Radiation: What It Is and How It Affects You, New York, 1957. Ch. 3, 4, 11, 12.

Bulletin of the Atomic Scientists, Radiation and Man. Special Issue, XIV, 1-64, Jan. 58.

The RAND Corporation, Report on a Study of Non-Military Defense, Report R-322-RC, July 1, 1958. 48 pages.

Ramsey, F. A., Jr. “Damage Assessment Systems and their Relationship to Post-Nuclear-Attack Damage and Recovery,” Naval Research Logistics Quarterly, V, 199-219, Sept. 58.

* * * * *

VII. DESIGN OF EFFICIENT MILITARY INSTITUTIONS

Smithies, Arthur. The Budgetary Process in the United States. New York 1955. Ch. 12: The Defense Budget: Economy and Efficiency in the Defense Program, pp. 278-325.

Lindblom, C.E. “Decision Making in Taxation and Expenditure,” Mimeograph, National Bureau of Economic Research: Conference on Public Finance, April 1959.

Enthoven, Alain, Rowen, Henry. “Defense Planning and Organization,” The RAND Corporation, Paper P-1640, March 17, 59, revised July 28, 59.

Knorr, Klaus. The War Potential of Nations. Princeton, 1956. Ch. 1: “War Potential in the Nuclear Age,” pp. 3-15; Ch. 6: “Wartime Administration,” pp. 99-118; Ch. 7: “The Allocation of Resources,” pp. 119-141.

Schelling, T.C. International Economics, Chapter 30, “Economic Warfare and Strategic Trade Controls,” pp. 487-511.

* * * * *

Livingston, J. Sterling. “Decision-Making in Weapons Development,” Harvard Business Review, Jan-Feb. 58.

Klein, Burton H. “A Radical Proposal for R and D,” Fortune, May 58, 112-.

Schelling, T. C. Internaitonal Economics. Ch. 31, “Trade Controls and National Security,” 511-532.

Breckner, Norman. “Government Efficiency and the Military ‘Buyer-Seller’ Device,” The RAND Corporation, P-1744, 8 July 1959.

Enthoven, Alain. “Supply and Demand and Military Pay,” RAND P-1186, 30 Sept. 1957.

Cordiner, Ralph. “A Modern Concept of Manpower Management and Compensation for Personnel of the Uniformed Service,” (The Cordiner Report), Defense Advisory Committee on Professional and Technical Compensation, U.S. Government Printing Office, 1957.

Source: Harvard University Archives. Syllabi, course outlines and reading lists in Economics, 1895-2003 (HUC 8522.2.1). Box 7, Folder: “Economics, 1959-1960”.

Image Source: From an internet page of the Rio Theatre in Vancouver.

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Exam Questions Harvard Suggested Reading Syllabus Undergraduate

Harvard. Reading list and final exam for course “Conflict, Coalition and Strategy”. Schelling, 1970

Post author By Irwin Collier
Post date 2019-03-24

There are undergraduate courses, and then there are great undergraduate courses. Today we have the 49 item course bibliography for Thomas C. Schelling’s “Conflict, Coalition and Strategy” along with its ten-page final examination. This material comes to Economics in the Rear-view Mirror from one of the students who took that course, then Harvard undergraduate, Robert Dohner. I am generally not jealous of Bob’s Harvard undergraduate education, but I’ll admit there are a good half-dozen economics and politics courses in my own Yale training that I would have gladly traded for that single Schelling semester in 1970. You can all thank Bob Dohner for sharing this memory!

The teaching assistant for the course, James T. Campen, was born 1943. He received an A.B. from Harvard in 1965, M.A. at St. John’s College, University of Cambridge in 1971 and Ph.D. from Harvard in 1976. Campen was active early on in the Union for Radical Political Economics and was on the faculty of the University of Massachusetts at Boston from 1977 where he worked up into his emeritus years.

_____________________

Economics 1030
“Conflict, Coalition and Strategy”
Prof. Thomas C. Schelling
Mr. James T. Campen
Fall 1970

(*Contained in Coop package)

Introduction (13 pages)

*Schelling, T. C., “Strategic Analysis and Social Problems,” Social Problems, Vol. 12 (Spring 1965), pp. 367-379.

I. Personal Incentives and Social Organization (56 pages)

Hardin, Garrett, “The Tragedy of the Commons,” Science, Vol. 162, No. 3859, pp. 1243-1248.
Olson, Mancur, Jr., The Logic of Collective Action (Harvard University Press, 1965), pp. 1-3,9-16, 53-57,86-87, 132-141.
Luce, R. Duncan and Howard Raiffa, Games and Decisions (John Wiley & Sons, Inc., 1957), Chapter 5.4, “An Example: The Prisoner’s Dilemma,” and Chapter 5.5, “Temporal Repetition of the Prisoner’s Dilemma,” pp. 94-102.
Demsetz, Harold, “Toward a Theory of Property Rights,” Papers and Proceedings of the American Economic Association, American Economic Review, Vol. 57 (May 1967), pp. 347-359.

II. Rules, Restraints, and Conventions (296 pages)

Schelling, T. C., “Some Thoughts on the Relevance of Game Theory to the Analysis of Ethical Systems,” in Ira R. Buchler and Hugo G. Nutini (eds.), Game Theory in the Behavioral Sciences (University of Pittsburgh Press, 1969), pp. 45-60.
Lorenz, Konrad, On Aggression (Harcourt, Brace & World, Inc., 1966), pp. 68-84, 109-138. NOTE: Different pages in Bantam paperback, pp. 64-80, 104-132.
Piaget, Jean, The Moral Judgment of the Child (The Free Press, 1965, and Collier Books, 1962, same translator and identical pagination in both versions), pp. 65-76, 94-100, 139-174, 197-232. NOTE: Hardcover editions dated 1932 and 1948 have these pages instead: pp. 56-69, 89-95, 135-171, 195-231. To check: the first selection begins, “Consciousness of Rules: II Third Stage.”
Jervis, Robert, The Logic of Images in International Relations (Princeton University Press, 1970), pp. 18, 90-110, 147-152, 197-205, 216-223.
Schelling, T. C., The Strategy of Conflict (Harvard University Press, 1963), Chapter 3, pp. 53-80, and Chapter 4, pp. 89-108.
Lewis, David K., Convention: A Philosophical Study (Harvard University Press, 1969), pp. 5-8, 36-51, 83-107, 118-121.

III. Contests and Disputes (123 pages)

Moore, Omar K. and Alan R. Anderson, “Puzzles, Games, and Social Interaction,” in David Braybooke, Philosophical Problems of the Social Sciences (The Macmillan Company, 1965), pp. 68-79.
Langholm, Sivert, “Violent Conflict Resolution and the Loser’s Reaction,” Journal of Peace Research, 1965-4, pp. 324-347.
Galtung, Johan, “Institutionalized Conflict Resolution,” Journal of Peace Research, 1965-4, pp. 348-383.
Goffman, Erving, Interaction Ritual (Anchor Books, 1967), pp. 239-270, “Where the Action Is.”
Skolnick, Jerome H., “Social Control in the Adversary System,” The Journal of Conflict Resolution, Vol. XI, No. 1 (March 1967), pp. 52-70.

IV. Formal Processes of Collective Decision (133 pages)

*Steinhaus, Hugo, “The Problem of Fair Division,” Econometrica, Vol. 16 (January 1948), pp. 101-104.
*Farquharson, Robin, “Sincerity and Strategy in Voting,” mimeograph, February 5, 1955, 7 pages.
Schelling, T. C., “What Is Game Theory?” in James C. Charlesworth (ed.), Contemporary Political Analysis (The Free Press, 1967), pp. 212-238.
Buchanan, James M. and Gordon Tulloch, The Calculus of Consent (The University of Michigan Press, 1962), pp. 43-62, 131-145, 249-262.
*Schelling, T. C., “Voting Schemes and Fair Division,” multilith, September 1970.
[Handwritten note: 23 10^thline 12^th1.27 s.b. 1.55. A gets 295 instead of 241. B gets 85]
Leiserson, Michael, “Game Theory and the Study of Coalition Behavior,” in Sven Groennings, E. W. Kelley, and Michael Leiserson (eds.), The Study of Coalition Behavior (Holt, Reinhardt and Winston, 1970), pp. 255-272.
Farquharson, Robin, Theory of Voting (Yale University Press, 1969), Appendix 3, pp. 77-80.

V. Individual and Collective Bargaining (266 pages)

Schelling, T. C., The Strategy of Conflict (Harvard University Press, 1963), Chapter 2, pp. 21-52, and Chapter 5, pp. 119-161.

[Handwritten note: Hour Exam]

Fisher, Roger, International Conflict for Beginners (Harper & Rowe, 1969), Chapter 3, “Making Threats Is Not Enough,” pp. 27-59.
Walton, R. E. and R. B. McKersie, A Behavioral Theory of Labor Negotiations (McGraw-Hill, 1965), pp. 4-6, 67-125, 310-340.
Ross, H. Laurence, Settled Out of Court (Aldine, 1970), Chapter IV, “Negotiation.” NOTE: Pending appearance of book, mimeograph copy on reserve, entitled “Negotiation.”
*Schelling, T. C., “Communication, Bargaining and Negotiation,” Arms Control and National Security, Vol. 1 (1969), pp. 69-71.
*Rapoport, Anatol and Melvin Guyer, “Taxonomy of 2 x 2 Games,” Papers, Vol. 6, 1966, Peace Research Society (International), pp. 11-26.

VI. Violence and Nonviolence (191 pages)

Sibley, Mulford Q., The Quiet Battle (Anchor Books, Doubleday & Company, Inc., 1963), pp. 9-10, 55-66.
Hubbard, Howard, “Five Long, Hot Summers and How They Grew,” The Public Interest, No. 12 (Summer 1968), pp. 3-24.
Nieburg, H. L., “Violence, Law and the Informal Polity,” Journal of Conflict Resolution, Vol. 13, No. 2 (June 1969), pp. 192-209.
Schelling, T. C., Arms and Influence (Yale University Press, 1966), pp. 1-18, 92-105, 116-125.
Roberts, Adam (Ed.), Civilian Resistance as a National Defense (Stackpole Books, 1968), or The Strategy of Civilian Defense (Faber & Faber Ltd., 1967) (the two versions are identical), pp. 9-13, 87-105, 205-211, 302-308.
Walter, Charles W., “Interposition: The Strategy and Its Uses,” Naval War College Review, Vol. XXII, No. 10 (June 1970), pp. 72-84.
Nozick, Robert, “Coercion,” in Sydney Morgenbesser, Patrick Suppes and Morton White (eds.), Philosophy, Science and Method (St. Martin’s Press, 1969), pp. 440-472.
Shure, Gerald H., Robert J. Meeker and Earle A. Hansford, “The Effectiveness of Pacifist Strategies in Bargaining Games,” The Journal of Conflict Resolution, Vol. IX, No. 1 (March 1965), pp. 106-117.

VII. Interactive Models: Large Groups (89 pages)

Penrose, L S., On the Objective Study of Crowd Behavior (H. K. Lewis & Company, Ltd., 1952), Chapter 6, “Panic Reactions,” pp. 28-35.
Boulding, Kenneth E., Conflict and Defense (Harper & Brothers, 1962), Chapter 6, “The Group as a Party to Conflict: The Ecological Model,” pp. 105-122.
Schelling, T. C., “Neighborhood Tipping,” Harvard Institute of Economic Research, Discussion Paper No. 100, December 1969.
*Schelling, T. C., “Models of Segregation,” The American Economic Review, Vol. LIX, No. 2 (May 1969), pp. 488-493.

VIII. Interactive Models: Two Parties (145 pages)

Boulding, Kenneth E., Conflict and Defense (Harper & Brothers, 1962), Chapter 2, “The Dynamics of Conflict: Richardson Process Models,” pp. 19-40.
Goffman, Erving, Interaction Ritual (Anchor Books, 1967), pp. 97-112, “Embarrassment and Social Organization.”
*Valavanis, Stefan, “The Resolution of Conflict When Utilities Interact,” Journal of Conflict Resolution, Vol. 2 (June 1958), pp. 156-169.
Schelling, T. C., The Strategy of Conflict (Harvard University Press, 1963), Chapter 9, pp. 207-229.
Boulding, Kenneth E., Conflict and Defense (Harper & Brothers, 1962), Chapter 12, “International Conflict: The Basic Model,” and Chapter 13, “International Conflict: Modifications,” pp. 227-273.
Schelling, T. C., “War Without Pain, and Other Models,” World Politics, Vol. 15, No. 3 (April 1963), pp. 465-487.

IX. Randomized Decision (55 pages)

*Schelling, T. C., “Zero-Sum Games,” multilith, September 1970.
Schelling, T. C., The Strategy of Conflict (Harvard University Press, 1963), pp. 175-190, 201-203.

Total pages: 1,367

Reading period: To be assigned later [see question 6 in final examination below]

Economics 1030
Final Exam
January 22, 1971

There are altogether six questions. The sixth contain several alternatives, according to your choice of reading-period assignment. You are not to answer any five questions out of the six. You may not choose more than one among the alternate forms of question six. Specifically, you may answer the first five questions; you may instead answer any four among the first five and one of the alternates in question 6.

The five questions you answer will be given equal weight and are intended to require about equal time.

Each of the terms, concepts or principles listed on the next page is to be identified by reference to a matrix. Several matrices are provided and are adequate, but you may prefer to construct your own. (There may be more than one matrix shown that illustrates a particular concept; some of the matrices shown may illustrate several concepts. You need not make reference to more than one–your own, or one of those shown.)
In some cases–marked by an asterisk–you need only identify an appropriate matrix; if, for example, one of the terms were “prisoners’ dilemma,” it would be sufficient to indicate Matrix #1. In other cases–where there is no asterisk–you will have to state clearly just what it is about the indicated matrix that exemplifies the concept; for example, if “promise” were one of the terms listed, you could state that in Matrix #1, if Column had first move, Row could promise first row on condition Column choose column 1, improving the expected outcome from payoffs of 1 apiece to 2 apiece in the upper left cell.

Here are the items to be identified:

1. warning
2. inducing move
3. altruist’s dilemma*
4. zero-difference game*
5. Pareto equilibrium
6. convention*
7. randomized commitment
8. dominated strategy
9. threat-vulnerable equilibrium
10. social contract*
11. [a first] alternative concepts of “arms agreement”
12. [a second] alternative concept of “arms agreement”
13. Insurance as a bargaining advantage or disadvantage

* * * * * * * * * * *

Explain the concept of interposition (Charles Walters, “Interposition: The Strategy and Its Uses”), and compare it with non-violent intervention (Gene Sharp, “The Technique of Non–Violent Action,” or Howard Hubbard, “Five Long Hot Summers and How They Grew”), then examine the strategic similarities and differences between (a) naval-force interposition and (b) tactics used to blockade, occupy or immobilize a campus building.

* * * * * * * * * * *

John Stuart Mill argued that even

…if it may possibly be doubted whether a noble character is always the happier for its nobleness, there can be no doubt that it makes other people happier, and that the world in general is immensely a gainer by it. Utilitarianism, therefore, could only attain its end by the general cultivation of nobleness of character, even if each individual were only benefited by the nobleness of others, and his own, so far as happiness is concerned, were the sheer deduction from the benefit.

Assuming that the hypothesis which Mill discusses is true (that nobleness in itself detracts from individual happiness), under what conditions would you expect individuals to choose to develop noble characters? Discuss with reference to readings and lectures concerning interplay of individual incentives, social organization and moral codes.

* * * * * * * * * * *

One of the questions on a makeup examination which you will take tomorrow will be based on either an article by Smith or an article by Jones. Your limited time in the library’s rules make it impossible for you to study both articles. If the exam question is based on the Smith article, you will have a 90 percent chance of answering it correctly if you read Smith, but will surely fail to answer correctly if you read Jones; if the exam question is based on Jones, you will have a 60 percent chance of getting it right if you study Jones, no chance otherwise. You will get the question either right or wrong; no partial credit will be given.
You want to use your study time to maximize the probability of answering the question correctly. Your examiner will choose the exam question in such a way as to minimize the same probability. Both you and she know all of the information in this paragraph, and both of you are familiar with the basic theory of two-person zero-sum games.

1. Draw a payoff matrix to illustrate the situation, letting your payoffs be represented by the probability of getting the correct answer.
2. What will be your strategy in this situation?
3. What will be the teacher’s strategy be?
4. If you use the strategy which you indicated in A2, what is the probability that you will get a correct answer?

You suddenly recognize that the librarian whom you will be asking for one of the articles is also your teacher’s secretary, and knows which article the question will be based on.

1. If you could get the secretary to tell you truthfully which article you should read, what would be your probability of getting the correct answer be? (That is, you are to estimate this probability before asking for the article, on the assumption that the librarian will know the answer and answer truthfully.)
2. If you felt that the librarian/secretary would answer your question truthfully six chances out of 10 but there was a 40 percent chance the examiner would be told that you tried to cheat, resulting in your receiving an automatic zero on this question (but with no other negative consequences), would asking the library and increase your overall probability of getting credit for the question?

If you knew (and the teacher knew that you knew) that the teacher believed that you would have .7 chance of answering either question, given that you studied the right article, but you alone knew that the chances were 90 percent and 60 percent for the two articles as mentioned above:

1. What would your strategy be?
2. What would be your probability of getting the question right?

Now consider the situation where you might be able to get the question correct even if you chose the wrong article. The chances of this are 1/5 if the question is based on Smith and 2/5 if the question is based on Jones. (Both you and the teacher correctly understand the situation.)

1. What is your strategy in this case?
2. What is the teacher’s strategy?
3. What are your chances for getting the correct answer?

Consider the same problem as in Part D with one change: you and the teacher both know that he wants you to do as well as possible on the exam.

1. What is your strategy?
2. What is the teacher’s strategy?
3. What is your probability of getting the correct answer?

* * * * * * * * * * *

You are one of two students in a small class who have arranged to write a paper in lieu of a final exam. You are certain that the grade your paper receives will depend not only on how much time you spend on it but also on how much time the other student spends on his. Even if the examiner tries to judge your paper on its merits alone he will be unconsciously influenced by how it compares with the other student’s paper.

You estimate…

1. …that you will lose about 3 grade points on other exams for every 10 hours you spend on this paper;
2. …that your grade on this paper will be:
  1. 5, 9, 12, 14 or 15 points according as you spend 10, 20, 30, 40 or 50 hours on it,
  2. plus 3, 5 or 6 points if you spend 10, 20 or 30 hours more than your rival, and minus 3, 5 or 6 points if you spend 10, 20 or 30 hours less than your rival.

When you plot a smooth graph of your overall grade, taking all three factors into account–quality of your paper, quality of the competing paper, time taken away from your other courses–you get the following “contours” of your overall net score as a function of the time you both devote to your papers.

The graph is interpreted this way. If you work 30 hours and he does nothing, you get a net score of 9 (i.e., a gross score of 12 for your paper on its merits, plus 6 for superiority, less 9 for the 30 hours taken from other courses). If you both work 30 hours you get 3 (the same 12 on your own paper, less 9 on other courses, and did nothing for superiority). If you work 20 hours and he works 10, you get 6. Every point on the graph denotes a combination of your work time and his; every point has an associated net score for you; points of equal score can be connected by “contour lines” is in the graph. (The dotted lines at 45 degrees represents equal time for the two of you.)

You are quite sure that your rival, whoever he is, has a nearly identical graph when he considers his own grade in relation to the time you both spend on your papers.

Draw your “reaction curve” (otherwise called in Boulding, “partial-equilibrium curve” or “reaction function”), and explain what it means.
Drawing on your knowledge that your rival reaches identical estimates with respect to his own grades, draw his reaction curve.
Locate and characterize any equilibria that occur.
Discuss the likely amounts of work the two of you will do on each of the following alternative assumptions:
1. Each of you can see the other work–in the library, for example–and can keep count of each other’s time, but you are unacquainted and not permitted to consult each other.
2. You have no idea who the other student is and no way to monitor the amount of work he does, nor does he know who you are.
3. You do not know who he is, but are sure that he can recognize you and watches you work in the library, keeping track of how much work you do.
4. You are well enough acquainted to get together and talk the situation over, reaching an understanding about how much work you intend to do, perhaps reaching a bargain on restraining your competition; but you are not close enough friends to be unselfish toward each other and furthermore you do not know how badly each other may need grade points.

* * * * * * * * * * *

This question is based on the reading period assignment. If you chose one of the following four books answer Part A:

Edward C. Banfield, The Moral Basis of a Backward Society
J. H. Dales, Pollution, Property and Prices
H. L. Nieburg, Political Violence: The Behavioral Process
Carl M. Stevens, Strategy and Collective Bargaining Negotiation

If you chose James M. Buchanan and Gordon Tullock, The Calculus of Consent, answer Part B.

If you chose Erving Goffman, Interaction Ritual, answer Part C.

If you chose Robert Jervis, The Logic of Images in International Relations, answer Part D.

If you chose Mancur Olson, Jr., The Logic of Collective Action, answer Part E.

Identify one or more major themes or propositions in the book which you chose is the reading period assignment. Discuss what you consider to be the most more interesting and/or important ways that these themes illuminate the body of Economics 1030 and are in turn illuminated by it. Be specific.
Buchanan and Tullock
1. Using their concept of “cost,” explain the roles ascribed by the authors to unanimity rule, majority rule, and any other competing alternatives rules.
2. On what conditions, if any, or with what reservations, would you accept their point of view?
Goffman

Goffman’s book contains the word, “ritual,” in its title, and every chapter involves some analysis of ritual in phase-to-face behavior even though the chapters were originally independent essays. Explain what “ritual” means in this context and identify its role in the following topics of Economics 1030:

1. 1. Personal incentives and social organization
  2. Rules, restraints and conventions
  3. Contests and disputes
  4. Formal processes of collective decision
  5. Individual and collective bargaining

Jervis
Define signals and indices, then illustrate the manipulation of indices, and the veracity and ambiguity of signals, by reference to any one of the following sources of signals and indices, which you should examine in some detail:
1. An advertising campaign
2. A student’s essay on a final examination
3. The public relations involved in the year-long process of selecting a Harvard president
Olson
Most of Olson’s book is devoted to an analysis of the behavior of large groups. How important is group size? In what ways does the behavior of small groups differ systematically from that of larger ones? What are the most important reasons for this?
With reference to college courses, speculate briefly on the location and significance of the boundary between “small” and “large.”

Source: Personal copy of course syllabus and final examination shared for transcription at Economics in the Rear-View Mirror by Robert Dohner (Harvard, 1974; M.I.T., 1980).

Image Source: From Schelling testifying before a Senate subcommittee on national security in 1966. New York Times, Dec. 13, 2016.

Tags Campen, Schelling

Where to Find the Motherload

Course Outline and Reading Assignments

Outline and Readings

Spring 1981 Course Plan

ECONOMIC PRINCIPLES AND PUBLIC POLICY

M-228 & ECONOMICS 1021 Spring 1981

T. C. Schelling/Harvard University ECONOMIC PRINCIPLES AND PUBLIC POLICY Spring 1981

Ec. 1021 M- 228

EXAM QUESTIONS FROM EARLIER YEARS

About Chairman John T. Dunlop (Harvard Album, 1960)

Previously posted departmental reports

Report Department of Economics, 1961-1962

All three were eventually given Harvard professorships anyway

Haberler’s Protest: Preface to his Colleagues

Haberler’s Protest in Full

CONFIDENTIAL.

Other Written Exams in Economic Theory

HARVARD UNIVERSITY Department of Economics

Written Economic Theory Examination April 8, 1963

HARVARD UNIVERSITY CENTER FOR INTERNATIONAL AFFAIRS

HARVARD UNIVERSITY CENTER FOR INTERNATIONAL AFFAIRS

Schelling’s Memo to Dunlop and the Exam Committee

Chamberlin’s Memo to the Exam Committee

Leontief Letter to Schelling

Other Written Exams in Economic Theory

HARVARD UNIVERSITY Department of Economics

Written Exam in Economic Theory November 13, 1962

HARVARD UNIVERSITY CENTER FOR INTERNATIONAL AFFAIRS

HARVARD UNIVERSITY CENTER FOR INTERNATIONAL AFFAIRS

Course Announcement

Economics 135 Games and Strategy Fall, 1963

Reading Assignments

FINAL EXAMINATION ECONOMICS 135 January 29, 1964

From the 1962 Radcliffe Yearbook

Yale Requests Domar’s Opinion of Schelling

Yale University Department of Economics New Haven, Connecticut

Copy of Domar’s Response

“Galbraith Asks Campus Blacklist of Recruiters”

The Boston Globe. 14 November 1967 pp. 1,9.

Letter from John Kenneth Galbraith

Unsent, but circulated, reaction to Galbraith’s proposal by Alexander Gerschenkron

HARVARD UNIVERSITY DEPARTMENT OF ECONOMICS

Letter from John Kenneth Galbraith

Letter from Thomas Schelling in response to Galbraith’s boycott proposal

An Academic [Arthur Smithies] in the War By Seth M. Kupferberg

ECONOMICS 207 Economics and National Security Spring 1960

READING ASSIGNMENTS

GENERAL BACKGROUND

I. EFFICIENCY IN MILITARY DECISIONS

II. COPING WITH AN INTELLIGENT ADVERSARY

III. EXPERIMENT AND SIMULATION

IV. THE STRATEGY OF POTENTIAL FORCE

V. ECONOMICS OF DISASTER

VI. EXTREMES AND INTANGIBLES IN SOCIAL CHOICE

VII. DESIGN OF EFFICIENT MILITARY INSTITUTIONS

Economics 1030 “Conflict, Coalition and Strategy” Prof. Thomas C. Schelling Mr. James T. Campen Fall 1970

Economics 1030 Final Exam January 22, 1971

Spring 1981
Course Plan

ECONOMIC PRINCIPLES
AND PUBLIC POLICY

M-228 & ECONOMICS 1021
Spring 1981

T. C. Schelling/Harvard University
ECONOMIC PRINCIPLES
AND PUBLIC POLICY
Spring 1981

Ec. 1021
M- 228

About Chairman John T. Dunlop
(Harvard Album, 1960)

Report
Department of Economics, 1961-1962

All three were eventually given
Harvard professorships anyway

Haberler’s Protest:
Preface to his Colleagues

Other Written Exams
in Economic Theory

HARVARD UNIVERSITY
Department of Economics

Written Economic Theory Examination
April 8, 1963

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Schelling’s Memo to Dunlop
and the Exam Committee

Chamberlin’s Memo
to the Exam Committee

Other Written Exams
in Economic Theory

HARVARD UNIVERSITY
Department of Economics

Written Exam in Economic Theory
November 13, 1962

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

HARVARD UNIVERSITY
CENTER FOR INTERNATIONAL AFFAIRS

Economics 135
Games and Strategy
Fall, 1963

FINAL EXAMINATION
ECONOMICS 135
January 29, 1964

Yale University
Department of Economics
New Haven, Connecticut

Unsent, but circulated, reaction to Galbraith’s proposal
by Alexander Gerschenkron

HARVARD UNIVERSITY
DEPARTMENT OF ECONOMICS

An Academic [Arthur Smithies] in the War
By Seth M. Kupferberg

ECONOMICS 207
Economics and National Security
Spring 1960

Economics 1030
“Conflict, Coalition and Strategy”
Prof. Thomas C. Schelling
Mr. James T. Campen
Fall 1970

Economics 1030
Final Exam
January 22, 1971