Social Science—The Syllabus

Urban civilization was the topic for the first quarter both because it was seen as “a laboratory for the study of human nature and social life” and also because the city was an integral element in the growth of modern civilization—the move from a folk society to an industrial society that had featured strongly in the introductory course.³⁰ The latter point emerges strongly from the discus­sion topics the students were assigned at the end of the first week.

FOR DISCUSSION

“What his house is to the peasant, the city is to civilized man.... It is a quite certain, but never fully recognized, fact that all great cultures are city-born.. World-history is the history of city men.”—Oswald Spengler, The Decline of the West

“The growth of cities, the world over, has been the most conspicu­ous social phenomenon of the past hundred years.”—W. B. Munro, Municipal Government and Administration³

The course progressed through the structure of cities, their social organiza­tion, and human behavior in cities. The last covered “urban personality,” which included typical urban institutions, work (and lack of work) and income, delinquency, and crime, as well as various problems relating to cit­ies (social disorganization, communication, housing, religion, education, and recreation). They were required to discuss, among other quotations, the romantic poet Shelley's remark that “Hell is a city much like London.”³² The quarter concluded with social control: zoning and planning, the city and the country, the city of the future, and research and reform (the muckraking period being discussed here). The city was presented “as a social laboratory from the point of view of the Sociologist.”³³

In the second quarter, warning students to assume neither that the United States was superior to Europe nor vice versa, the course turned to politics, offering a detailed comparative study of the political, legal, and administrative systems of the United States, Britain, Germany, France, and Switzerland.

The third quarter, on the “interdependent economic relations of men,” focused on the need for coordination and the means by which it might be achieved.³⁴ In the year that Samuelson took this course, the Great Depression was at its worst, with high unemployment (giving him the excuse to spend the summer on the beach, because there was no hope at all of getting work) and the progressive disintegration of the world's economic system into a number of trading blocks. After a historical account of interdependence from the industrial revolution to the present day, various methods of coordi­nating economic activity were discussed: custom, central planning, and the market. Students were recommended to read material on the Soviet system and on scientific management. Before turning to what was probably seen as the heart of the course, students were introduced to the institutions of a market economy. This covered private enterprise and ownership, specializa­tion, business organization, labor organization, speculative production, and credit. Only then was the operation of the price system discussed.

The six lectures on “How Price in the Market Organizes Economic Activity” were, unlike any previous section of the course, on theory. They were more abstract than previous material—so much so that the sections on the price system, supply and demand, and the pricing of productive services were followed by “The Problem of the ‘Application' of Economic Theory”: (a) the measurement of prices, demand, and supply; and (b) the statistical method in economics.

Though economics has a long history of supply and demand analyses, the statistical estimation of demand and supply curves was then very much a minority activity. It was much more common to defend economic theory by appealing to introspection or psychological theory, but in Henry Schultz, Chicago had one of the major exponents of this approach. However, the topic for discussion was not any remark made by Schultz but, rather, a long para­graph by the physicist Max Planck.

How can practical laws be derived by considering phenomena the cause of which has, provisionally, to be left unexplained? Like the social sciences, physics has learnt to appreciate the great importance of a method completely different from the purely causal, and has applied it since the middle of the last century with continually increasing success. This is the statistical method, and the newest advances in theoretical physics have been bound up in its development. Instead of seeing, without tangible results, the dynamical laws at present com­pletely unknown to us, which govern a solitary occurrence, observa­tions of a large number of isolated occurrences of a definite kind are collected and an average or mean value obtained. For the calculation of these mean values certain empirical rules are available, according to the special circumstances of the case. These rules permit the pre­diction of future occurrences, not with absolute certainty, but with a probability which is often practically equivalent to certainty. Though a method which is fundamentally an expedient appears unsuited and unsympathetic to the scientific needs of many workers, who desire principally an elucidation of causal relations, yet it has become abso­lutely indispensable in practical physics. A renunciation of it would involve the abandonment of the most important of the recent advance of physical science. —Max Planck, A Survey of Physical Theory?⁵

The authority of one of the world's most eminent physicists was clearly being used to argue for what was still a highly controversial stance in economics.

“WHEN you CANNOT MEASURE ⅜ YOUR KNOWLEDGE IS ⅜ MEAGER ⅜ and ⅜ unsatisfactory ⅛'' Lord Kelvin^c

c. The flowers stand for the decorative motifs that are placed within the quotation as it is

carved on the Social Sciences Building and which have been shown to denote words that Though some Chicago economists agreed with the sentiment—the quota­tion had been organized by the sociologist William Ogburn, one of whose lectures Samuelson had heard earlier that year—others did not. Frank Knight and Jacob Viner both disagreed with it; moreover, it represented a view that had been opposed in a highly influential book published the previous year by Lionel Robbins (1932), who questioned whether statistically estimated demand curves were useful.^d Given such disagreements within the social science faculty, the discussion surrounding the Planck quotation must have been lively.

The problem of economic interdependence almost inevitably led to problems of international trade, the lectures covering tariffs and protection, international monetary problems, migration, and the economic causes of war, all immensely topical subjects in 1932. The course ended with no fewer than six lectures on “the general problem of human welfare in a system based on pecuniary exchange.” The first topic under this heading, “Social Cost and Profit vs. Individual Cost and Profit,” is reminiscent of the wel­fare economics associated with the Cambridge (UK) professor A. C. Pigou, whose Economics of Welfare (1920), then in its fourth edition, has come to be seen as the leading treatment of the subject. However, the syllabus suggests a different approach was taken, inquiring about “human costs of industry” and “human utility of consumption.”³⁶ Such language resonates more with romantic critics of orthodox economics and John Ruskin than with Cambridge economics.

had to be omitted to make the quotation fit the available space. The full story of this inscription is told in Merton et al. 1984.

d. Viner is reputed to have amended it to “When you can measure it, when you can express it in numbers, your knowledge is still of a meagre and unsatisfactory kind,” and Knight is reputed to have added, “and when you cannot measure, measure anyway.” See Merton et al. 1984.

e. Given what does appear in the reading list, it seems unlikely that such material was omitted simply because it was thought too technical for students at this level.

In the assigned chapters, Slichter stressed consumers’ ignorance about the products they were buying, marketing, and the need for consumer protec­tion. This brought the students back to questions of long-range planning, discussed at the start of the course, though here they were referred not to discussions of Soviet central planning but to an article in the New Republic by the Columbia economist John Maurice Clark, the son of John Bates Clark, the latter commonly seen as one of the great figures in American economics at the end of the nineteenth century.^f

J. M. Clark’s “Long Range Planning for the Regularization of Industry,” published in January 1932, the year of Franklin Roosevelt’s first presiden­tial election victory, was directed at the problem facing the United States three years into the Great Depression, with output still falling.

The main hope of results lies in the combination of scientific fact­finding directed to uncovering the cause of instability, a standing organization [composed of experts] devoted to the problem, and rep­resentation of all the interests involved, which between them have a far larger stake in stabilization policies than single business enterprises feel. No one of these alone would be sufficient, but from the combina­tion of all of them some results may fairly be expected.³⁷

A letter Samuelson wrote to Clark in 1946 makes it clear that, though he was eventually to come around to Clark’s views, as an undergraduate Samuelson became critical of attempts to manage spending and control the busi­ness cycle.³⁸ The course he took with Director the previous year may have

f. Samuelson thus had an unorthodox introduction to welfare economics, a field on which he was to leave a distinctive mark. See chapter 22 this volume.

encouraged him to assume a skeptical position toward planning. If so, he would have been critical of the position taken by Gideonse.^g Samuelson’s dis­missal of Gideonse’s introductory course, which he disparagingly called “eco­nomics for poets,” would have been an apt summary of the Ruskin-inspired welfare economics that Gideonse taught in the course that Samuelson did take. Given that he did not see the relevance of mathematics to economics until the following year, it is plausible that at this stage he may not have grasped the significance for economics of Planck’s arguments about statistics, along with Clark’s support for stabilization policy. If so, these were both views on which he was to undergo a profound change of mind.