262. J. R. Hicks to Harrod , 4 November  [a]
[Replies to a letter not found] [Harrod's letter, dated 2 November, is actually among a batch of Hicks materials offered for sale: see the Updates]
The London School of Economics and Political Science, London #
4 November  [b]
I have thought on your very interesting criticism very carefully; and I think I am quite prepared to concede the substance of your point, though I would put up a verbal defence--that the "range of neutral inventions" referred to the extension of Pigou's definition, not to Pigou's definition itself.  Of course on Pigou's assumption the definition of "neutral" is exact.
But I freely confess that I had not thought out the implications of Pigou's definition throughout, and here your letter has been very helpful. I can see now that this discussion would have been much improved if I had allowed for the consequential shift in social demand curve which must follow the invention--just as I did allow for the consequential changes in supply of the factors of production. I neglected these consequences rather over-hurriedly, because I had satisfied myself that "autonomous" changes in demand were very similar in their effects to inventions. But the result is that these pages (122-3) are inadequate, and that I classify inventions here on the basis of effects which are only partly the effect of the invention and partly of the "induced" change in demand.  That is what it comes to, isn't it?
It is very nice of you to express yourself as you do about my book in general; I appreciate it very much.
By the way, I was very interested in your review of Wilson in the E.J.,  though I have not yet had the time to think out the matter properly. But I had just been reading Yntema's "Mathematical Formulation of International Trade theory",  which got very near to that sort of point, though not quite on to it. You have probably seen Yntema; if not, I recommend it very much--it seemed to me a good piece of work.
I am looking forward to your book  --and the assistance it will no doubt give me in delivering next year a better course of lectures on Int. Trade than the unsatisfactory mess I am making this year. 
Yours very sincerely,
J. R. Hicks
2. The terms "induced" and "autonomous" are defined, with reference to invention rather than to demand, in Hicks, The Theory of Wages, p. 125.
3. Harrod, "Capital Imports and the Terms of Trade ..., by R. Wilson" ( 1932:5 ).
4. T. O. Yntema, A Mathematical Reformulation of the General Theory of International Trade, Chicago: University of Chicago Press, 1932.
5. Harrod, International Economics ( 1933:10 ).
6. During Michaelmas term 1932, Hicks taught on "Foreign Exchange and International Trade" to B.Sc. students. The course was repeated during Summer term in the following two academic years; Harrod's International Economics, however, was not listed among the recommended books (London School of Economics, Announcements Michaelmas Term 1932, Summer Term 1934, and Summer Term 1935).
- a. ALS, two pages on one leaf, in KHLM, 166, with envelope addressed to Christ Church.
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