9/07/2014

In case anyone gets interested...

     Here is an article about the early history of Economics Department in University of Rochester. The author is its founder, Professor Lionel McKenzie. I got this paper from Professor Roman Pancs, instructor of grad level micro theory in U of R. 


      I am going to devote my lecture to a description of the early years of the Rochester department of economics. I think this attention to the early years is justified since the tradition of rigorous scholarship that has characterized Rochester economics over the years was established in that early period, and both faculty and graduate students, including Japanese graduate students, played important roles in this development. Indeed, an important part of the contribution of these people to economics was the tradition of rigorous scholarship that they began in this department.

     The Rochester Department of Economics was established in 1957 when I was appointed as its first chairman. I was chosen on the recommendation of Paul Samuelson and Robert Solow who were professors at MIT. The search for a chairman to undertake the establishment of a doctoral program in economics at Rochester had been underway for at least a year without success. Finally the Dean of the college Albert Noyes, a noted chemist, went to MIT to consult with Samuelson and Solow who recommended me. I was approached by Bernard Schilling, a professor of English from Rochester, who was on leave at Yale where I was visiting the Cowles Foundation, This led to a visit to Rochester to meet the selection committee. The two principal economists on this cornmittee were
Donald Gilbert and Robert France. Gilbert was acting chairman since the chairman William Dunkman was on leave at International Christian University in Japan. Gilbert was also Provost of the University. France had been appointed the previous year from Princeton, I was at Duke where I had been for nine years on returning from Oxford. After my visit I accepted the position at Rochester. I was attracted by the prospect of building a department according to my own ideas, which, in the event, would mean that economic theory would be the major emphasis. I was much impressed by the personality of Dean Noyes and accepted his assurances of the serious intention of the university to support the project. They also intended to develop graduate studies in other fields of the social
sciences and humanities. On the suggestion of Joseph Spengler, a colleague of mine on the Duke faculty, I asked for twenty graduate fellowships when the department reached its equilibrium size. The commitment was made and was kept As I told a later president of the University, Rochester never failed to fulfill its commitments to me. Previously there had been a Department of Economics and Business Administration. My first appointment was made even before the new department was
established. This was Ronald Jones on the recommendation of his thesis supervisor Robert Solow. Solow predicted, with perfect foresight that Jones would publish many good papers. Ialso quickly discovered that Ron was a fine lecturer, the type who gives a clean logical presentation without notes. My students will recognize this is not really my style. In the spring of 1957 Ron Jones and I visited Don Gilbert in Rochester. Unfortunately this would be our last contact with him since he died before I came into residence in the fall of 1957. Ron had to do some months of military service and did not
arrive until December of 1957. There were trvo holdovers from the old department of economics and business administration, in addition to France and Dunkman. These were Jack Taylor in industrial organization, and Warren Hunsberger in international trade. Neither of these quite fitted the objectives of the nerv graduate program and therefore were not retained. However, Jack Taylor remained in Rochester and taught for rnany years at St. John Fisher College. In the first year of the new department there were two visitors, J. N. Wolfe and Ian Macdonald. N{acdonald was a graduate student with me at Duke. Wolfe had been a student of John Hicks at Oxford and had been visiting in the University of Toronto. He ran our departmental seminar that year, His signal achievement was to persuade John Hicks to give a lecture in the spring. Hicks had been my supervisor at Oxford. On this occasion our first graduate student Akira Takayama took a famous snapshot of Hicks kneeling before our portable blackboard and writing mathematical expressions to illustrate his lecture on a Value and Capital theory of growth. This lecture was also given by Hicks in Berkeley, California, and somewhere in Japan. lt was heard by Roy Radner in Berkeley and by Michio Morishima in Japan. They immediately set to work to write important papers on the stability theory of optimal growth, which is often referred to as turnpike theory. My own contributions to this subject were not inspired by Hicks but by the book of Dorfman, Samuelson, and Solow. Morishima later lectured in Rochester, but I believe, unless my memory fails me, we were never visited by Radner. In his lecture Morishima confided to us that his mathematics was GI mathematics. since he learned it while lying in his bunk aboard Japanese naval vessels.

      Recruiting the new department began in the first year with two assistant professors Richard Rosett and Edward Zabel. Rosett was an econometrician from Yale who studied with James Tobin. I met him while visiting the Cowles Foundation in 1956. For me he was the most interesting participant in the Cowles coffee hour. Zabel was a theorist interested in theory of the firm and mathematical programming, who was with the Rand Corporation. He was recommended by Oskar Morgenstern With me, Jones, and France this completed the first faculty for the Ph, D. program, which offered the fields general equilibrium theory, theory of the firm, econometrics, international trade, and labor economics. The program was approved by the college, and seven students were
admitted and awarded fellowships for the academic year 1958-1959 One of these was Akira Takayama who had arrived the previous year, sent over by Don Gilbert's son in law, who taught at International Christian University in Japan. Five of the entering students succeeded in completing their degrees. Very appropriately they were distributed evenly over the early appointees. Akira Takayama worked with Jones with some advice from rne, Emmanuel Drandakis with me, William Bennett with Rosett, and Arnold SafIer with Zabel. Subsequently Takayama and Drandakis became successful teachers at the graduate level, Takayama in the United States and Japan and Drandakis in the United States and Greece. Takayama published a widely used textbook in mathematical
economics and Drandakis came to head the Athens School of Economics. Bennett became chairman of the economics department of the New York State College in Buffalo, and Saffer had a successful career in consulting for business firms. In the first years of the graduate program we were fortunate to have the example of intense application to study set by Takayama who would spend most of the night at his desk in the library. At the beginning of our program we received a small grant from the Ford
Foundation to provide support for summer research. However in a short while our young
assistant professors were able to get their own research funds from the NSF. This helped
to increase the interest in our department, at least in the States.
      
      When I refer to the early department Imean primarily the department during the first five years of the graduate program from 1958-59 to 1962-63. I will show you a departmental picture taken in the spring of 1962. This picture hangs in our common room in Rochester. There are two later pictures of the department hanging in the common room, but only in this one do the members of the department wear jackets and ties. So has academic dress declined, at least in Rochester. However let me add that for the other half of the original Department of Econornics and Business Administration, who developed into the Simon School of Business, jackets and ties are expected In the early days I
functioned as a benevolent dictator since the new appointments who were at the core of the graduate program did not have tenure. The department eventually choose Dick Rosett to suggest to me that it might be a good idea to hold departmental meetings. Apparently only Rosett had the nerve to approach the dictator. Iclaim that I readily agreed to the meetings. I may add that in those days rve kept minutes of our meetings a practice that later lapsed well after the end of my chairmanship. Alater appointment, Sherwin Rosen who became chairman of the Chicago department of economics, told me that he admired the way I would introduce the agenda so that I always got my preferred decision adopted. He said that he later tried to follow my example at Chicago but it didn't work.
Perhaps you will forgive me for introducing some lighter subjects that the members of the early department like to recall. Bob Fogel has described a practice which was quite unknown to me. Apparently a few members of the junior staff sometimes met in one of their oflices for card games, either bridge or poker. Since I was a benevolent dictator in those days they kept a sharp lookout for me, apparently thinking I might take vengeance on them for such an unproductive use of their time. Although I doubt that their concern was justified they did succeed in keeping the card game secret from me. However, another fun activity included me. We had a bowling team in the University6
league that we called "The Variables", Ibelieve the name was due to Dick Rosett. The team included me, Jones, Rosett, and sometimes Penner. I'm afraid we were not very good, partly because the best bowlers in the department,EdZabel and Bill Dunkman were already on other teams. There was also a group of golfers who took advantage of a public golf course across the road from the University in Genesee Valley Park. it included Ron Jones, Ed Zabel, Bill Dunkman, and later Sherwin Rosen, comprising a foursome. Sometimes graduate students would join them. In addition to these activities
being a young department with attractive wives we had many parties. Also a nice occasion was the tea in the faculty club that the department gave the graduate students at the beginning of each academic year. The wives served the tea from silver teapots provided by the University Women's Club, and alcohol was not served. The conversations between faculty and students were quite lively. Alcohol intruded later and in my opinion the event was never as successful after that happened. We also started the custom of a departmental picnic which has continued to the present day, though in our
day athletic contests were more popular among those at the picnic. With regard to the social environment of the early department a special mention is merited of my wife Blanche. She played a large role in making both new faculty and students comfortable in their new environment. She continued to do this throughout her life but it was especially important for the early department. In 1995 at a reception after I had received the medal of the Rising Sun Akihiro Amano in a tribute to her referred to her as their academic mother.

      The association of Rochester economics with Japan was already well established
in these early years by a series of outstanding students who completed the Ph. D."l
program.. Iwill say a few words about them. As I mentioned Akira Takayama was in
residence when the doctoral program began. Both Akira and Ron Jones attended my first
value theory course in the spring of 1958. Akihiro Amano entered in 1960. He was
planning to stay for only one year but he found our program attractive enough that he
decided to remain for the full Ph D. program. Working with Ron Jones he produced an
excellenthesis in the field of international trade. In particular, Amano introduced a new
notation that facilitated the proof of trade theorems. In 1961 another Japanese student
Hiroshi Atsumi entered. He was recommended to us by his professor in Japan, Hukukane
Nikaido. Professor Nikaido, rvho rvas at Osaka University at that time, was one of the
economists whom we had invited to send students to Rochester. Atsumi wrote his thesis
with me. It was very original and made important contributions to the theory of optimal
growth. Together with the German economist Christian Weizsacker he introduced the
overtaking criterion in the theory of optimal growth. This allowed him to deal with
problems in which the horizon is taken at infinity. He was also the first theoristo
produce an optimal growth model with more than one sector. According to Jones and
Rosett, when their classes became boring Hiroshi would turn offhis hearing aid.
However I never observed this behavior mvself. Nobuo Minabe entered in 1961 anrl
worked with Ron Jones. He made extensions of international trade theory by use of
geometrical methods. Finally Yasuo Uekawa entered in 1963. We believe the students
from Kansai probably learned of Rochester from Professor Mizutani at Kobe Commercial
University. Mizutaniwas a friend of Ed Zabel. Following a suggestion from the visiting
professor John Chipman, Uekawa generalized in significant ways Stolper-Samuelson
theory in international trade and the theory of factor price equalization between countries8
that enjoy free trade. It is sad to record that Takayama and Uekawa are deceased. The
economics department has established fellowships in memory of them for which
Japanese students are given preference, Of the four Japanese graduates who were
admitted by 1963 three subsequently taught at Rochester as visitors. These are Takayama,
Amano, and Atsumi. Altogether 23 students who completed their doctorates were
admitted in these years. In addition to students from Japan there were students from the
United States, Greece, India, and Taiwan. It was our policy to admit and support students
purely on the basis of their ability with no attention to their country of origin. On one
occasion the State Department refused to admit a Taiwanese student because he had
family in communist China and therefore might be subjecto intimidation. Ithreatened to
resign over the issue and got the support of our congressman. Happily they relented.
Initially our graduates had some difficulty obtaining jobs in some countries from which
they had come. This was never true of Japan but discrimination seemed to be practiced in
India. However, today India no longer discriminates. Indeed I have sometimes asked
people what university has had the largest number of Rochester graduates teaching at one
time. They never guess that it is Calcutta with nine.

       In the Fall of 1962 two appointments to the University were made that had
considerable implications for our department in future years, William Riker was
appointed with the charge of developing a Ph. D. program in political science, and Allen
Wallis was chosen to be president of the University. Wallis was recommended to us and
to the selection committee by Milton Friedman. Friedman was brought to Rochester to
appear in a lecture series that had been established in honor of Donald Gilbert. I recall my
discussion with Bill Riker when he came to the University to consider whether to accept9
a position there. He had spent some time at the Center for Advanced Study in the
Behavioral Sciences in Stanford in the company of Kenneth furow. Thus he was
interested in applying analytical methods to political science. Of course I welcomed him
heartily to Rochester and described my department's goals to him. The presence of an
economics departrnent whose success was already well known played an important role
in making these appointments possible.

      We did something to cement relations with political science by appointing
Duncan Black as a visitor for 1962-3 directing him to the political science department.
Duncan Black was an early contributor to the analysis of decision making by committees.
This was close to the interests of Riker who was applying game theory to competition
between political parties. He was also an expert on the mathematician, Lewis Carroll, the
author of Alice in Wonderland and an early theorist of political choice in committees and
elections. Wallis developed a new businesschool with a major emphasis on economics.
Although we remained independent of the business school, over the years there has been
considerable interaction between their economists and ours, especially in the area of
maaroeconomics. There were many appointments that were joint both with political
science and the business school. Indeed, at one time I believe a large lraction of the
members of the political science department held Ph. D.'s in economics.

      After the first year of the graduate program several additional appointments were
made to the early department. Nanda Choudry was appointed in 1959 as an
econometrician. He later went to Toronto. Richard Weckstein came in 1959 as a visitor to
teach development economics. He later went to Williams College. In 1960 S, C. Tsiang
was appointed. This allowed the macroeconomic field to be established. S. C. Tsiang hadl0
been teaching at Johns Hopkins University and serving as an adviser to the government
of Taiwan. He also bears some responsibility for the monetary stability of the economy of
Taiwan. We were warned that Tsiang was not very effective as a teacher of large
undergraduate classes. However, this did not deter us. He taught graduate and
undergraduate seminars very well for us. Harry Grubert from MIT was also with us for a
few years in the macro field. He is now in the United States Treasury with responsibilities
for foreign transactions. Alexander Eckstein, a specialist in the economy of communist
China, was appointed in 1960. He brought the distinguished Japanese economist Shigeto
Tsuru to Rochester as a visitor. My wife and I enjoyed our first Japanese dinner in his
apartment. In 1961 Rudolph Penner was appointed for the field of public finance, which
had been a special interest of the former chairman, Donald Gilbert. Penner later became
head of the Congressional Budget Oflice in Washington, D. C. In 1963 the field of
econometrics received a major boost from the appointment of Michio Hatanaka who had
been working with Oskar Morgenstern in Princeton and played a role in introducing
spectral analysis to econometrics. Morgenstern had been the supervisor of my graduate
study at Princeton.. Norman Kaplan replaced Eckstein in 1963. Kaplan was an expert on
the Soviet economy Both Eckstein and Kaplan held the Xerox professorship supported by
the Xerox Corporation, a professorship which is now held by Ronald Jones.

      After the first year of the graduate program my proudest recruiting was done to provide strength in economic history and labor economics. Our department had taken as its mission the promotion of theory and its utilization in applied fields. We wanted to find people who could use theory, mathematics, and statistics in labor economics and economic history. To say the least we were either extremely clever or extremely lucky.tl tl Alexander Eckstein soughthe advice of the economic historian Simon Kuznets at Johns Hopkins University. Kuznets recommended Robert Fogel. We heard Fogel in seminar one day and appointed him the next day You could do that in those days This was in face of the fact that he had been a member of the Communist Party and had a rnixed marriage. These things mattered in those days. But we regarded the prejudices of other people as our opportunities. He gave us his paper on the prospects of the Union Pacific Railroad at its inception, and we had no doubt that he met our requirements. At Rochester he did his research on the canal system in the United States in the period of railroad building for which he received the Nobel Prize.In making this appointment I had the strong support of Dick Rosett. Fogel reported his research to a meeting of the American Economic Association. Akihiro Amano told me recently that he and another student did the final preparation of Fogel's statistical materials in our primitive econometrics
laboratory, leaturing only Marchant calculators, while Fogel waited impatiently outside
in his car to leave for the airport. Amano remarked that thus was cliometrics born at Rochester. Bob Fogel has been fond of telling a story to illustrate the spirit of the early department. He asked Ron Jones for an introduction to general equilibrium theory which led Ron to give him a series of private lectures on general equilibrium This in turn led to an important paper by Jones on a simple model of general equilibrium which was published in the Journal of Political Economy. Fogel also received instruction in econometrics from Dick Rosett. When the Nobel Prize was awarded Fogel had moved to Chicago, so the fact that he had done the work at Rochester was not always made clear.
The recruitment of our labor economist was just beyond the early department by my definition. Bob France approached the Chicago department \n 1964 with ourt2 specifications for this appointment and received a recommendation for Sherwin Rosen.

      Sherwin had the mathematical background of an electrical engineer. There were some
reservations in the recommendations from Chicago but we felt we knew better. As it
turned out we were right. Rosen played a major role in bringing economic theory to bear
on labor economics and would with high probability have received the Nobel prize
except for his untimely death from lung cancer. The program in economic history was
further strengthened by the appointment in 1963 of Stanley Engerman, also a student of
Simon Kuznets. Engerman came to Rochester first as a replacement for Bob Fogel who
went to visit Chicago, but the arrangement turned out to be permanent, although Fogel
later returned on halftime basis.A famous research program was undertaken by Fogel and
Engerman comparing the productivity of slave laborers in the southern states of the
United States with the free laborers of the northern states. They showed that the slave
workers compared favorably with the free workers in productivity though, of course, they
did not condone the institution of slavery.

      Thus the early department had distinction in economic theory, international
economics, and comparative economic systems. Also the basis was laid for achieving
distinction in the fields of econometrics, labor economics, and economic history.
Macroeconomics remained rather weak since the expertise of S. C. Tsiang was
principally in the theory of money, although the appointment of Hugh Rose in 1961, on
the recommendation of Harry Johnson, added strength to this field. It is interesting that in
the 1970's with the appointment of Karl Brunner, Robert Barro, and Robert King,
macroeconomics became a very strong field, perhaps the field for which the deparlment
was best known in the United States in that period. This strength has continued to thel3
present day. In later years a notable change that occurred in theory was the rise of game
theoretical rnethods and, beginning with James Friedman, Rochester has reflected the
change. It should also be mentioned that we have had a series of very distinguished
econometricians succeeding Hatanaka, beginning with G. S. Madala.

       Of the five professors who initiated the graduate program in 1958 Jones and I
have remained in the Rochester economics department to this time, although Ihave not
taught classesince 1995. Zabel left to go to the University of Florida in Gainsville in
1980 and is now deceased. Rosett left Rochester in 1974 to become Dean of the Graduate
School of Business in the University of Chicago and later returned to Rochester to be
Dean of the College of Business in the Rochester Institute of Technology. He was also at
one time Chairman of the board of directors of tlie National Bureau of Econornic
Research France became Director of Budgets for the University and Vice-President for
Planning. He is now decease