Research and the PhD Program
The main responsibility for changing the research profile of the Economics Department was taken by W. Rupert Maclaurin (1907—1959), who had been one of those involved in recruiting Samuelson.c An associate professor when Samuelson arrived, he was promoted to full professor in 1942.
Though born in New Zealand, Maclaurin was an MIT insider, being the son of the president of MIT who had been responsible for moving what was then Boston Tech across the Charles River to Cambridge, where it became the Massachusetts Institute of Technology.15 Indicative of his position as an insider, the President’s Report that announced his appointment in 1936 also contained details of the activities to establish a memorial to his father. Writing to the British economist Joan Robinson at the end of the decade, Samuelson described him as “an able chap with interests largely in the field of applied economics, particularly technological innovation. He is also what we in America would call a ‘go-getter.’ A type that you have perhaps not sufficiently encountered.”16 Samuelson claimed that MIT president Compton gave Maclaurin a “loose rein” on account of his having inherited “his father’s green begging hand” (a reference to the funds Maclaurin’s father had raised in order to move MIT to its new campus).17In 1937, Compton, responding to suggestions from two businessmen, took the initiative in setting up an Industrial Relations Section, modeled on one established at Princeton. Assisted by Freeman and Maclaurin, he raised $125,000 to support the new unit in its first five years. Maclaurin was appointed its head.18 It was responsible for research projects on topics such as hiring and layoff policies in a leading Massachusetts industrial company, industrial relations policies, and the supply and demand for labor in the paper industry.19 Anticipating the establishment of a PhD program in economics, in 1939 Maclaurin approached Joseph Willits at the Rockefeller Foundation, asking for support.20 Explaining that they believed their graduate program would be stronger with an organized research program, he proposed a three-year study of the labor market in a Massachusetts industrial community.
Though Maclaurin was proposing research to be undertaken by economists, it remained closely tied to engineering.In supporting the proposal, Compton drew attention to the fact that the Industrial Relations Section was the only organization of its type to be located in an engineering school, and he also pointed out the practical importance of the research for engineers. He claimed that many MIT graduates found
c. See chapter 15 this volume. themselves having to determine or implement industrial relations policies, and this research would bring them into “intimate contact with the problems and personnel of the field.”21 The application was not successful and after some further unsuccessful attempts to apply for funds, Maclaurin changed his emphasis and approached the Rockefeller Foundation about a broader project that would be more suited to “appeal to the imagination and fitness of technical students.”22 He would devote less time to research in industrial relations and instead proposed to work out “an area particularly suited, such as the processes by which technical improvements spread through industry, or a study of the types of companies in different industries which are the initiators of technical change, whether the same types of companies initiated such changes.”23
To support his case, Maclaurin pointed not only to the involvement of his own department with the Mathematics Department but also to the rising interest that many professors in engineering departments were showing in economics.d He argued that problems of mutual interest to economists and engineers could “best be developed if a special research fund were made available for graduate student and staff research devoted to the economics of industrial technology.”24 The topic he proposed to cover, “The Impact, Timing and Effect of Technological Change upon the American Economy,” reflected his time at Harvard, where despite being in the business school, he had been one of Schumpeter’s favorite students.25 Under this Schumpeterian heading, Maclaurin proposed a broad program out of which he hoped that specific projects would emerge “after the ground had been thoroughly explored by means of graduate seminars carried on in co-operation with some of the technical specialists from the engineering departments.”26 Such a change would take the department’s research away from industrial relations and toward a cross-disciplinary research venture involving economics and engineering.
Though it shows the direction in which Maclaurin was trying to shape the department’s research, this was another grant proposal that came to nothing. However, in April 1941, Maclaurin submitted a successful application for $50,000, involving Samuelson, who had arrived a few months earlier, “to initiate a series of studies under the general topic of ‘The Impact, Timing and Effect of Technological Change upon the American Economy.’ ” He wrote,
We believe that this is an area in which an Economics Department with a young and growing Division of Industrial Relations located
d. This claim is borne out by the frequency with which economics was mentioned in the accounts of these departments’ activities in the annual Reports of the President. in an engineering school should be in a position to make a significant contribution. It would be our hope that over a period of years the specialists whom we might develop would help to interpret the processes of technological change and their economic and social implications to economists, government officials, labor leaders, and industrialists.27
It was an academic research project, but one that could have practical implications. It would cover three topics: factors in the individual firm influencing technological change involving substantial capital investment; case studies of union-management (or employee-management) relations and regulations concerning the introduction of technological change; and overall statistical studies of innovation. The description of the last of these topics adopted a Schumpeterian tone, in that it asked about the evidence for clustering of innovations and variation in the extent of innovation in different phases of the cycle. It also involved considering the character of new investment—how much was due to new industries and innovation, how much to growth in population and land, and how much to more intensive use of capital in old industries. The proposal reflected Hansen's thinking in proposing to establish whether a bias toward capital-saving innovations increased the likelihood of secular stagnation.
Maclaurin explained that MIT would contribute the spare time of himself, Samuelson, and Myers, and that $10,000 would be used to cover research assistance. If given support, he wrote,
Our plan would be that while I would be in general charge, I would concentrate my own research efforts on company practices concerning technological change. Samuelson would work on overall statistical studies of innovation, and Myers on some case studies of union-management relations concerning the introduction of technical change.28
The Rockefeller Foundation decided to award $30,000 over three years.29 This was less than Maclaurin had asked for, but it remained a substantial project, in which many MIT economists, especially instructors, were to be involved. The foundation's evaluation of the project focused on its interest to engineers and economists, as well as its potential practical value.
The proposal represents an unusual attempt to define a field of interest to both engineers and economists. It is a field in which an Economics Department located in an engineering school should be in a position to make a significant contribution. The staff which will undertake the program rank well in their respective disciplines. It is the belief of the officers that over a period of years the results of this program will aid in interpreting the processes of technological change and their economic and social implications to economists, government officials, labor leaders and industrialists.30
On receiving the grant, Maclaurin immediately obtained permission to use it to pay Samuelson’s summer salary, so that he did not feel pressure to take on consultant work outside MIT.31 Though wartime commitments soon forced him to withdraw from Maclaurin’s project, Samuelson was being drawn into working on a predominantly statistical project that was intended to be thoroughly integrated into the main activities of an engineering school.
Maclaurin’s research project began in July 1941, and the following fall saw the beginning of a PhD program in industrial economics.
The title of the program was chosen to reflect the ethos of MIT: it reflected both Maclaurin’s new interests and the department’s expertise in industrial relations, most early theses being in the latter field. At the end of the year, the president reported that there had been a surprisingly large number of applicants, and that it was hoped to find, from those going through the program, “leaders for economic planning and coordination, especially after the war.”32 The entry requirements included not simply three full-year courses in social science, including economics, but also at least one full year of mathematics and a full year of science. As in other MIT programs, students were required to take a minor in a related field. In addition to specific program requirements, there was an MIT requirement that anyone entering its graduate school, in whatever field, was required to have taken several mathematics courses covering calculus and differential equations, at least one year of college chemistry, and at least two years of college physics, as well as the language requirements that were expected everywhere.33 While industrial relations students, who were in the majority in the early years of the program, would no doubt have found business administration an attractive minor, those with interests relating to Samuelson’s could opt for mathematics. In the second year of the program, several students were to take advantage of this option.